Question

1) If a country has a population of 500 million, an adult working age population of 300 million, and there are 160 million people employed and 40 million people looking for work, then its unemployment rate is A) 8% B) 13.33. C) 20% D) 25% E) none of the above. 2) If disposable income increases by $100 million, and consumption increases by $75 million, then the marginal propensity to consume is A) 0.9. B) 0.8. C) 0.75 D) 0.6. 3) Which of the following would decrease the size of the government spending multiplier? A) an increase in the tax rate B) an increase in the quantity of imports purchased by households from an increase in income C) a decrease in MPC D) an increase in the MPC 4) Assume that government spending in Denmark will be 400 billion krona in 2019 and that tax collections will be 425 billion krona. Given these numbers, Denmark is a. running a budget deficit of 25 billion krona b. running a budget surplus of 25 billion krona c. operating at full employment with a zero deficit or surplus d. running a monetary surplus where money supply exceeds money demand by 25 million euros. e. obviously the next country to leave the Euro-zone, and will soon stage a Denexit 5) In May of 2019 the unemployment rate in Europe was 12 %. In June of 2019, 10 million more people entered the labor force but only 2 million of these people found jobs. Assume that this is the only change in people employed versus people unemployed for the month of June relative to May. From this change alone, in June, the labor force participation rate will rate will A) increase, decrease. B) decrease, decrease. C) decrease, increase. D) increase, increase. and the unemployment 6) Jack is highly paid computer programmer with skills highly demanded in the marketplace. He has a bad temper and just told his boss "you are an idiot." He was fired, but he knows he can get a better job within a few months. Jack is now experiencing A) permanent B) cyclical C) frictional D) structural unemployment.

Answer 1

1. B
2. C
3. C
4. B
5. D
6. C

oo epopulatio Emplaged unemplog 300 mw 40 m (uwempliz orki Papuloti unemplat ate 4 o Kioo (B) i3.33 o Cesuptio MPC= 9ncee 5 5 (C Loo G SM 1- MPC MPC deeveases Decvease ih GSM .*.

Gout Speudis 40 0 Rn kasna 4-25 B krona Tay Cauetia Budgat Suspdus a gn kena 2 5 (425-460) = b. Unemplozd UR = LF n ma Ul 12 June LF LF+1) Ut (10-2) Ut 8 LF 10 LF LFPe'- LF workiy a June: In LF LF nerease LF PR' w (LA

UR a alse ncaease and Coeet epesing (G Jaek nao Fritional unepegmat nenplegat is the Job seare Becaust Instautanous hat (C) is CorTeet