The table accompanying lists the joint distribution of unemployment in the United States in 2001 by demographic characteristics (race and gender)
Joint Distribution of Unemployment by Demographic Characteristics,
United States, 2001
White
(Y = 0) Black and Other
(Y = 1) Total
Age 16-19
(X = 0) 0.13 0.05 0.18
Age 20 and above (X = 1) 0.60 0.22 0.82
Total 0.73 0.27 1.00
(a) What is the percentage of unemployed white teenagers?
(b) Calculate the conditional distribution for the categories "white" and "black and other."
(c) Given your answer in the previous question, how do you reconcile this fact with the probability to be 60% of finding an unemployed adult white person, and only 22% for the category "black and other."
What will be an ideal response?
Answer:
(a) Pr(Y = 0, X = 0) = 0.13.
(b)
Conditional Distribution of Unemployment by Demographic
Characteristics, United States, 2001
White
(Y = 0) Black and Other
(Y = 1)
Age 16-19
(X = 0) 0.18 0.19
Age 20 and above (X = 1) 0.82 0.81
Total 1.00 1.00
(c) The original table showed the joint probability distribution, while the table in (b) presented the conditional probability distribution.
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A) $300. B) $200. C) $100. D) $400.
In the United States, who determines the combination of bond and money creation that finances the federal budget deficit?
A) the federal government itself B) the Federal Reserve C) the private banking system D) private bond- and money-holders
Inflation results
(a) when the price of one good or service increases. (b) when too much money is chasing too few goods. (c) when prices, on average, decrease across the economy. (d) when banks decrease lending.
Which of the following statements best describes the neoclassical argument about unemployment and inflation?
a. Neoclassical economists argue that any short-term gains in lower unemployment will eventually vanish and the result of active policy will only be inflation. b. Neoclassical economists argue that any long-term gains in lower unemployment will eventually vanish and the result of active policy will only be inflation. c. Neoclassical economists argue that any short-term gains in lower unemployment will eventually vanish and the result of active policy will only be deflation. d. Neoclassical economists argue that any long-term gains in lower unemployment will eventually vanish and the result of active policy will only be deflation.