Question

The data in this table are for Wisconsin in August 2020. Use the data to answer the next two questions.

Population	4,661,000
Labor force participation rate	65%
Unemployment rate	6.2%

Question 6 (3 points)

Using the data from the preceding table, determine the number of people in Wisconsin's labor force in August 2020. You do not need to show your work.

Your answer:

Question 7 (3 points)

Using the data from the preceding table, determine the number of unemployed workers in Wisconsin in August 2020. You do not need to show your work.

Your answer:

Question 8 (3 points)

Paul Hollywood lives in a very small country with a population of 30 people, 20 of whom are in the labor force.

Last year, Paul lost his job and actively searched for a new one. Now, he has stopped looking for a new job because he has given up hope of finding one.

As a result, the unemployment rate will

a	increase
b	decrease
c	not change

Question 9 (3 points)

Which of the following best describes long-run trends in U.S. labor force participation?

a	Labor force participation has decreased for women but increased for men.
b	Labor force participation has increased for males and for females.
c	Labor force participation has decreased for males and for females.
d	Labor force participation has decreased for men but increased for women.

Question 10 (3 points)

Giordano's Pizza in Kenosha currently has 30 employees and the marginal product of labor equals 10. If the nominal wage is $20 and the price level is 4, then which of these actions would be most beneficial for Giordano's?

a	hire one more employee
b	hire one fewer employee (in other words, fire one of the 30 employees)
c	continue with 30 employees; do not hire any additional workers and do not fire any of the existing workers.

Question 11 (3 points)

Suppose the marginal propensity to consume (MPC) equals 0.8 and the total amount of taxes (T) is exogenous, as in our models from Chapter 3.

If the government reduces T by 100, then private saving will ____________ and national saving will ____________.

a	increase by 20; decrease by 80
b	increase by 100; increase by 100
c	not change; fall by 100
d	increase by 80; increase by 80
e	increase by 80; fall by 20

Question 12 (3 points)

Which of the following is an example of "investment," as the term is used in macroeconomics?

a	Guillermo gets a job working for Dell Computer Company and saves half his income.
b	Laszlo buys a new Dell computer for his personal use.
c	Nandor buys 100 shares of Dell computer stock.
d	Nadja buys new Dell computers for her business.

Question 13 (3 points)

In Chapter 3's model of the Loanable Funds market, the demand for funds comes from

a	national saving
b	private saving
c	investment
d	banks that have more excess reserves than they desire
e	banks that have insufficient reserves

Question 14 (3 points)

Suppose a technological innovation is introduced. According to the model of the loanable funds market, this would cause

a	government purchases to increase.
b	investment to decline.
c	the real interest rate to rise.
d	private saving to increase.

Question 15 (3 points)

Suppose the labor force increases due to immigration. Using the models of Chapter 3, determine the effect on GDP and the real interest rate.

a	GDP increases, the real interest rate falls.
b	GDP increases, the real interest rate increases.
c	GDP increases, the real interest rate does not change.
d	GDP does not change, the real interest rate increases.
e	GDP does not change, and the real interest rate also does not change.

Question 16 (3 points)

You need to purchase a particular economics textbook for a course next semester. You want to get the best price, so you compare the prices charged by the campus bookstore, Amazon.com, and other textbook sellers. This only takes a few minutes, and you end up saving $30.

This story illustrates which of the following functions of money?

a	asset of investment
b	unit of account
c	store of value
d	medium of exchange

Question 17 (3 points)

Here is the balance sheet for ABC Bank:

assets	liabilities & capital
reserves $100	deposits $600
loans $500	debt/borrowings $200
securities $400	capital ?

How much capital does ABC Bank have?

a	$100
b	$200
c	$400
d	$600
e	$1000

Question 18 (3 points)

Which of the following is an example of an "open market operation"?

a	The Federal Reserve sells $100 million worth of Treasury bonds to banks.
b	The government issues $100 million worth of Treasury bonds to finance its deficit.
c	Jeff Bezos buys $100 million worth of Treasury bonds for his personal portfolio.
d	The Treasury prints $100 million worth of currency.

Question 19 (3 points)

Frank's Fish Fry sells fish fry dinners. Frank's revenue equals the quantity of fish fry dinners he sells times the price he charges for a fish fry dinner.

From last year to this year, his quantity increases by 4% and the price he charges increases by 3%. Frank's revenue increases approximately by

a	4%
b	3%
c	7%
d	1%
e	12%

Question 20 (3 points)

Nominal GDP = 600, real GDP = 400, and the nominal money supply equals 200.

Velocity equals

a	3
b	2
c	600
d	800
e	400

Question 21 (3 points)

The quantity theory of money is intended to explain

a	the growth rate of the money supply in the short run
b	the behavior of inflation in the short run
c	the growth rate of the money supply over the long run
d	the behavior of inflation over the long run
e	nominal GDP in the short run
f	real GDP in the long run

Question 22 (3 points)

According to the quantity theory of money, if the annual growth rate of real GDP is 4 percent and the annual growth rate of the money supply is 6 percent, then the annual inflation rate equals

a	2 percent
b	4 percent
c	6 percent
d	8 percent
e	10 percent

Question 23 (3 points)

Initially, the annual growth rate of real GDP is 5 percent and the inflation rate is 7 percent.

If the annual growrth rate of real GDP falls to 4 percent and the money growth rate does not change, the inflation rate will

a	remain at 7 percent
b	increase to 8 percent
c	decrease to 6 percent

Question 24 (3 points)

In the real world, countries that have faster money growth over the long run tend to have

a	lower government budget deficits over the long run
b	higher inflation over the long run
c	lower inflation over the long run
d	lower nominal interest rates over the long run

Answer 1

6. labour force = 65 % of population = 4661000 * 65 % = 30,29,650

7. unemployed = 6.2 % of labour force = 1,87,838.3

8. As a result the unemployment rate will not change

As Paul not looking actively for work, he is considered to be discouraged worker and they are not considered part of of labour force and unemployed. So the unemployment rate will remain the same.

9. Answer is “ labour force participation has decreased for men but increased for women”

In US Labour force participaiton has decreased over years but participation by women increased in US.