3/4/23,10:12 PM Chapter 2-A
Student: Instructor: Ece GULERYUZ Assignment: Chapter 2
Date: Course: Advanced Macroeconomics 9! ) P
1.
The rate of unemploymenttendsto (1) duringrecessionsand (2) _—______ during expansions.
During prolonged recessions, it is difficult for workers to find a job and many workers become discouraged.
Which of the following is a correct statement?
(O A. Discouraged workers are counted in the labor force and cause the participation rate to fall.
() B. Discouraged workers are not counted in the labor force and cause the participation rate to
rise.
(O C. Discouraged workers are not counted in the labor force and cause the participation rate to fall.
() D. Discouraged workers are counted in the labor force and cause the participation rate to rise.
(1) O rise ) O fall
(O remain unchanged O rise
O fall (O remain unchanged
2. When an analysis is conducted of the factors underlying demand (e.g., consumer sentiment) as the determinant of output in an
economy, the time frame under considerationisthe (1) —__ run.
When an assessment is made of an economy's prospects over a period of, say, a decade, the time frame under consideration is the
@2 — run
(1) O short (2) O medium
O medium O long
O long O short
3. The figure on the right plots the change in the unemployment 4
rate on the vertical axis against the output growth rate on the
Change in the unemployment rate
horizontal axis for a hypothetical economy. The line drawn in the
graph gives the best fit to the scatterplot.
(percentage points)
According to this figure, lower output growth leads to
(1)—— in the unemployment rate.
If the slope of the line in the graph is - 0.5, we can say that, on
average, a decrease in the growth rate of 1% increases the
unemployment rate by roughly :I%. (Enter your
response as a positive real number.)
According to the figure, the unemployment rate will remain
constant if the output growth rate is about I:l%. =3 T 1 T T 1 1
-5 -3 0 3 6 8 10
(Round your response to one decimal place.)
Output growth (percent)
(1) O adecrease
O no change
() anincrease
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4. An economy produces three goods: cars, computers, and oranges. Quantities and prices per unit for years 2006 and 2007 are
shown in the table below.
2006 2007
Quantity Price Quantity Price
Cars 10 $2,000 12 $3,000
Computers. 4 $1,000 6 $500
Oranges 1,000 $1.00 1,000 $1.00
Nominal GDP for 2006 is $|:. (Round your response to two decimal places.)
Nominal GDP for 2007 is $:|. (Round your response to two decimal places.)
Using the prices for 2006 as the set of common prices, real GDP in 2006 is $:|. (Round your response to two decimal
places.)
Using the prices for 2006 as the set of common prices, real GDP in 2007 is $:|, (Round your response to two decimal
places.)
Using the prices for 2006 as the set of common prices, the GDP deflator for 2006 is \:’ (Round your response to two
decimal places.)
Using the prices for 2006 as the set of common prices, the GDP deflator for 2007 is l:l (Round your response to two
decimal places.)
Using the GDP deflators you calculated above, the rate of inflation from 2006 to 2007 is I:l%, (Round your response
to two decimal places.)
Using the prices for 2007 as the set of common prices, real GDP in 2006 is $|:|, (Round your response to two decimal
places.)
Using the prices for 2007 as the set of common prices, real GDP in 2007 is $|:|. (Round your response to two decimal
places.)
Using the prices for 2007 as the set of common prices, the GDP deflator for 2006 is I:l (Round your response to two
decimal places.)
Using the prices for 2007 as the set of common prices, the GDP deflator for 2007 is I:l (Round your response to two
decimal places.)
Using the GDP deflators you calculated above, the inflation rate from 2006 to 2007 is ‘:l% (Round your response to
two decimal places.)
Explain why there are differences between the two rates of inflation you calculated above.
Is this a matter of one being correct and the other incorrect?
() A. The calculation using numbers from 2006 is correct because the economy was more stable
that year.
() B. The calculation using the older figures is correct because we have had more time to test
these figures for accuracy.
() C. The calculation using the newer figures is more reliable since the data are more recent.
(O D. Neither is more correct than the other; they just use different units.
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5. Which of the following best describes the change in nominal and real GDP from 1960 to 2014 in the United States?
() A. GDP in 2014 was about 32 times higher in nominal terms and about 5 times higher in real terms compared to 1960 levels.
() B. GDP in 2014 was about 32 times lower in real terms and about 5 times lower in nominal terms compared to 1960 levels.
() €. GDP in 2014 was about 32 times higher in real terms and about 5 times higher in nominal terms compared to 1960 levels.
() D. GDP in 2014 was about 32 times lower in nominal terms and about 5 times lower in real terms compared to 1960 levels.
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1. (1) rise
(2) fall
C. Discouraged workers are not counted in the labor force and cause the participation rate to fall.
. (1) short
N
(2) medium
. (1) an increase
w
0.5
4.5
4. 25,000.00
40,000.00
25,000.00
31,000.00
1.00
1.29
29.00
33,000.00
40,000.00
0.76
1.00
31.58
D. Neither is more correct than the other; they just use different units.
5. A. GDP in 2014 was about 32 times higher in nominal terms and about 5 times higher in real terms compared to 1960 levels.
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