Question

Table 23.1: Real GDP, Population and the Civilian Labor Force Statistics Labor Force | Real GDP Population Participation Unemployment Year (in Billions $) (in Millions) Rates (%) Rates (%) 1,019.00 110.000 0.750 5.00% 1,020.00 111.000 0.756 6.00% 1,030.00 112.000 0.788 6.5096 1,035.00 113.000 0.769 7.0096 millions, and the percentage change in 26) In Year 4, according to Table 23.1, the total employed workers were_ per-capita income was -percent, respectively. A) 80.61; 3.50 B) 78.22; 0.33 C) 80.81; minus 0.40 D) 83.14; 1.01. 27) Assume an economy experienced a lower inflation rate, as measured by the General Price Level Index (P), between Year 2 and Year 3 than it experienced between Year I and Year 2. Which of the following scenarios is consistent with this assumption? A) P was 110 in Year 1.120 in Year 2, and 135 in Year 3. B) P was 110 in Year 1, 120 in Year 2, and 128 in Year 3. C) P was 110 in Year 1, 117 in Year 2, and 130 in Year 3. D) P was 115 in Year 1,119 in Year 2, and 126 in Year 3.

Answer 1

26.

Correct Answer:

C

Working note:

In year 4, total employed workers = 113*.769*(1-7%)

In year 4, total employed workers = 80.81 Million

Now,

Percentage change in per capital income = ((1035/113) - (1030/112))/(1030/112)

Percentage change in per capital income = -.40%

So, correct alternative is C.

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27.

Correct Answer:

B

Working note:

As per the alternative B,

Inflation rate between year 2 and 3 = (128-120)/120 = 6.67%

Inflation rate between year 1 and 2 = (120 - 110)/110 = 9.09%

So, alternative B is consistent with the given scenario.