Question

technology is known as _____ unemployment.

Question 6 options:

	a) structural
	b) seasonal
	c) cyclical
	d) frictional

The nominal value of wages explains how much a consumer can pay for goods and services.

Question 7 options:

	a) True
	b) False

The consumer price index does NOT include:

Question 8 options:

	a) the price of a haircut.
	b) apartment rental rates.
	c) the price of milk.
	d) property taxes.

If the nominal GDP is $13 trillion for a given year and the GDP deflator for that year is 115, then the real GDP is:

Question 9 options:

	a) $11.3 trillion.
	b) $14.95 trillion.
	c) $13.0 trillion.
	d) $12.0 trillion.

Which statement about chained consumer price index for urban consumers (C-CPI-U) is TRUE?

Question 10 options:

	a) It does a better job in approximating a cost-of-living index than the CPI.
	b) It has no advantage over the CPI.
	c) It is generally higher than the CPI.
	d) It takes less time to estimate than the CPI.

Answer 1

1. Changes that takes place due to Technology and the unemployment it creates is part of structural unemployment.

2. The statement is False.

It is real value of wages that decides how much a consumer can pay for goods and services

3. The CPI does not includes Property taxes.

A Consumer Price Index measures changes in the price level of a basket of consumer goods and services purchased by households

4. Answer is $ 11.3 Trillion Dollars

GDP Deflator = Nominal GDP / Real GDP

115 = 13 / Real GDP

Real GDP = 13 / 115 = 0.1130 or (11.30 Trillion $)

5.Chained CPI for Urban consumers does better job in approximating cost of living index than CPI.

The chain-weighted CPI is considered to be a more accurate inflation gauge than the traditional CPI because chain-weighted CPI it accounts for the fact that consumers’ purchasing decisions change along with changes in prices as opposed to merely measuring periodic changes in the price of a fixed basket of goods.