Question

Macroeconomics True or False questions.

( ) 21. The price change is not related to unemployment..

( ) 22. The growth of per capita GDP is not related to immigration.

( ) 23. Persons of not-in-labor force are not related to employment ratio.

( ) 24. Natural unemployment rate is related to cyclical unemployment rate.

( ) 25. The spending GDP is the income GDP in its scope.

( ) 26. GDP deflator measures the price changes from the base year .

( ) 27. Efficiency wage results in labor shortage.

Answer 1

21.

Answer: false

It is related to unemployment – at an increasing price (known as inflation) the unemployment rate decreases, since there is an inverse relationship between inflation and unemployment.

22.

Answer: false

It is related. Per capita GDP = Total GDP / Population

If immigration increases in the country, it increases population and GDP both; now, if such population is not so productive the GDP would not increase as much as population increases; it decreases per capita GDP.

23.

Answer: true

Labor force is the aggregate of unemployed and employed. Employment ratio = (Employed / Labor force) × 100. Therefore, the persons (like under 16 aged) not in the labor force should not be in employed as well and not in the part in employment ratio.

24.

Answer: false

This is only related to structural and frictional unemployment rates, but not cyclical.

25.

Answer: false

This is the expenditure approach of calculating GDP; therefore, this is not the income approach of calculating.

26.

Answer: true

GDP deflator = (Nominal GDP / Real GDP) × 100

The real GDP indicates the GDP at base year price and nominal GDP indicates at current year price. Since one is divided by the other, it reflects the price change.

27.

Answer: false

This is the higher wage than the market wage rate. It creates higher supply of labor; therefore, there would be surplus but not shortage.