Classify each concept as microeconomic or macroeconomic. T/F. ***correct: -Long-term agreements become too risky for lenders, making it more difficult to obtain a loan. A deficit budget may be financed by the additional money creation. However, GDP does not take into account many factors that affect quality of life, like the amount of people’s (1) or the cleanliness of the 920. For each output, apply the appropriate label. The causes are: 1. Click on the names of countries where the standard of living improved substantially between 1950 and 2000. higher: -turkey -mexico -India lower: -Nicaragua. Match the job sectors to their workforce shares from 1800 to 2010. You have an opportunity to take a new job in a different city, where the cost of living is different. Max lives in Boston and earns $132,500 per year. A small clothing store shut down due to its customers buying clothes from a new big-box retailer. 2-Carla is a retired librarian who works part-time at a local bookstore. Place the correct price in each blank, to reflect the effects of inflation. Some also count built-in inflation as a third cause. (a) A list of factors that can cause an increase in demand from D 0 to D 1. Using this measure, it looks like Canada has a better standard of living than all but one other nation. Use the table to complete the sentence about race and unemployment. Even if inflation is low, the combination of inflation and a fixed income can create a substantial problem over time. ***incorrect: -higher demand -lower prices. Log in. Answer to Problem 1SCQ Inflation is the persistent increase in general price level over a period of time in an economy. C. -The cost of living in the new city is 10% lower, and you’d take a 5% pay cut. For one thing, a (1) country may have a low GDP but a high (2). ADVERTISEMENTS: Factors which causes Inflation (Factoring affecting Demand and Supply)! Assuming that the increase reflects the inflation rate and that this rate continues in 2016, match each number to its description. 1-CPI 2-GDP deflator 3-CPI 4-consumers 5-GDP deflator 6-CPI. High inflation has the power to decimate savings accounts and render them worthless, while it also can create price and market instability. 3-Elisha has moved to California and is taking classes while trying to find a job. Marshall has recently lost his job and is currently receiving federal jobless benefits. Country X has a labor force of (1), a labor force participation rate of (2), and an unemployment rate of (3). The lender worries that the loan rate is too low. Rising wages are a key cause of cost-push inflation because wages are the most significant cost for many firms. What best describes why inflation occurs? High levels of inflation aggravated agricultural problems, adding fuel to the fire of escalating unrest. Apply the correct label to each question. 1-gov debt 2-printing money 3-a sluggish 4-surprise. The combination of rising inflation and unemployment is called “ stagflation ,” and is feared by economists, central bankers and pretty much everyone else. Q: Fill in the blanks to complete the passage about the CPI and the GDP deflator. Click the area on the graph below that represents when the United States had the highest level of cyclical unemployment. -An unemployed banker during a recession. The most natural interpretation of "better off" is that citizens of Country B have a higher (1). -The majority of people who were unemployed in 2015 were looking for work for an extended length of time. T/F. Round to one decimal place. ***incorrect: -Consumers need to purchase gas to get to work. A. Total relevant population = 50,000,000 2-A new smartphone app solves math problems simply by pointing the camera at the page. For example, a supplier may hold a monopoly on the market, making a change to another supplier virtually impossible. ***correct: -Long-term agreements become too risky for lenders, making it more difficult to obtain a loan. (higher wages may also contribute to rising demand) 2. People decide to switch to Netflix instead. 1-Your neighbors grow and eat their own vegetables from their private garden. What issue might inflation cause for Daniel? 1. 4-A restaurant server takes home $75 in unreported tips each night. Full-time students = 4,200,000 Match the component of GDP national income accounting to the correct expenditure. Which of the following may be considered as part of the consumer price index? 31 million are underemployed Introduction of new products. Since investors haven't seen inflation or significant price rises in years, it's worth brushing up on the most common effects of inflation. If Max decides to move to San Francisco, what annual salary will he need to make in order to maintain the same real wage? Industrial Policy and the Expansion of the Scope of the Private Sector 2. 1. Match the level of unemployment with the condition of the overall economy. Correctly classify each situation that GDP cannot measure. ADVERTISEMENTS: Factors which causes Inflation (Factoring affecting Demand and Supply)! To give you a taste, let's briefly go over cost-push inflation and demand-pull inflation . Ask your question. To reduce inflation, the Fed must usecontractionary policy. Cost-push inflation – higher oil prices feeding through into higher costs 3. False 3. Which of the following can cause inflation? Click on the unemployment rate range in which the U.S. natural unemployment rate is located. Expert Answer 100% (1 rating) Previous question Next question Get more help from Chegg. **correct: -Country B will eventually have a higher real GDP than Country A if the economy of each country continues to grow this way. Your parents bought their first car for $5,000. Get step-by-step explanations, verified by experts. However, in order to do so, she needs to find a loan. advances in tech typically cause the price of some goods to decrease over time, Match the situation to the factor that affects the accuracy of the CPI. GPD changes by –1%, what is the change in the velocity of money? An increase in payroll taxes leading to an increase in aggregate demand. *not included in GDP: -a microprocessor chip sold to a computer manufacturer -a smartphone manufactured overseas and sold locally *included in GDP: -landscaping on a residence -a computer sold to a retail consumer. -Gwyn might misinterpret rising prices associated with inflation for a higher demand. Do recessions always prevent a long-term increase in a nation’s real GDP? ( 10,000 x $40,000) + (5,000 x $90,000) = $850 million. Click on the part of the graph that best illustrates the upward bias of traditional CPI. Which of the following can be causes of frictional unemployment? Expectations can be a bit like a self-fulfilling prophecy. ***Included: -recently laid-off workers who are searching for new jobs ***Not included: -retired workers -recently laid-off workers who are not searching for jobs -a 15-year old student searching for his first job -employed workers who want to work more hours. Thirty years ago Daniel bought a plot of land for $50,000 when the CPI was 50. The Consumer Price Index (CPI) and the GDP deflator are both price indices, so they both serve as measures of inflation. The 5% unemployment rate is due to structural and (3) factors. increased money supply, relative to the supply of goods and services, Surprise inflation can help people who have borrowed money. Inflation can arise from internal and external events; Some inflationary pressures direct from the domestic economy, for example the decisions of utility businesses providing electricity or gas or water on their tariffs for the year ahead, or the pricing strategies of the food retailers based on the strength of demand and competitive pressure in their markets. Drag each government program to the appropriate type of unemployment the program would reduce. Ask your question. 4-Newer cars have built-in GPS and Bluetooth capabilities. correct: -changing the oil in your car yourself -cutting your own hair incorrect: -taking your car to the mechanic for routine maintenance -going to the barber. having the habit of migration ii. unintended redistributions of purchasing power. Inflation can affect the distribution of income because people with incomes rising faster than the rate of inflation enjoy an increasing purchasing power, while people with incomes rising more slowly than the rate of inflation are hurt by a decreasing purchasing power. Almost everyone is sure that he knows what inflation exactly is, but it remains a source of great deal of confusion because it is difficult to define it unambiguously. Which of the following scenarios would lead to an increase in the price level (i.e., a short-run inflation)? 1-Unstable inflation makes it difficult for lenders to anticipate the value of their money in the future. You can figure out how much the economy has grown over the years by simply looking at nominal GDP. ***incorrect: -Gwyn will need to pay more capital gains taxes. Cost-push inflation can be caused by many factors. Quickly and professionally. Wages do typically creep up with inflation over time eventually. 30 million are employed part-time. Many people switch to oranges because they are cheaper. In the short term, you can try to force the supplier to make some changes or lower the cost of the service when negotiating for a new contract. Inflation can be Demand-pull when increasing demand from consumers leads to an increase in prices, or Cost-push when higher supply costs lead to higher prices. How do non-market goods cause inaccuracies in measuring the productivity of a nation? Which of the following products would count toward GDP? It is possible that the citizens of Country B spend more time (2). chels16 chels16 01/14/2016 Business High School +5 pts. 1-non-market good 2-leisure time 3-quality of environment 4-underground economy. Which three countries would you expect to have the highest standard of living? The workers worry they agreed to lower wages than they should have. pensioners, students) will be worse off in real terms due to higher prices and equal income as before; this will lead to a reduction in the purchasing power of their income. But other effects can cause inflation at a rate wages can’t match, disrupting the balance. Micro: -why did company c increase its advertising budget?