Describe the alternative measures of unemployment
What will be an ideal response?
The Bureau of Labor Statistics keeps track of 6 alternative measures of unemployment:
• U-1 measures long-term unemployment. It counts as unemployed only workers who have been unemployed for 15 or more weeks.
• U-2 measures job losers; that is, only workers who lost their jobs (as opposed to quitting or reentering the labor market) are counted as unemployed.
• U-3 is the conventional measure of unemployment.
• U-4 adds discouraged workers to the conventional measure of unemployment.
• U-5 adds all marginally attached workers to the U-4 measure of unemployment.
• U-6 adds part-time workers who would like a full-time job (economic part-time workers) to the U-5 measure of unemployment.
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One year before maturity the price of a bond with a principal amount of $1,000 and a coupon rate of 5% paid annually fell to $981. The one year interest rate must be
A. 8.5%. B. 7.0%. C. 5.0%. D. 1.9%.
To encourage formation of small businesses, the government could provide subsidies; these subsidies
a. would be included in GDP because they are part of government purchases. b. would be included in GDP because they are part of investment expenditures. c. would not be included in GDP because they are transfer payments. d. would not be included in GDP because the government raises taxes to pay for them.
If a production possibility frontier is a straight line, it tells us that the opportunity cost of producing one more unit of good X is:
A) an increasing amount of good Y. B) a decreasing amount of good Y. C) equal to the inverse of the amount of good Y. D) a constant amount of good Y
Savings accounts are included in
A. M1 and M2. B. M2 only. C. M1 only. D. None of the choices are correct.