Chapter 7. Chapter 7

Data Exercises
Chapter 7
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Under Headlines: Mexico: The New China, the article discusses the opening of production facilities in Mexico and the advantages of quicksourcing close to the United States as opposed to outsourcing in China. In this question, you will be asked to analyze wage data to determine what happens to wages as the result of offshoring.

The source of the data is the Federal Reserve Bank of St. Louis (FRED), and they are available Federal Reserve Economic Data. To access the data:

1. Type “real” and “wages” in the search block and hit return.

2. For the first option, “Employed full time: Median usual weekly real earnings: Wage and salary workers: 16 years and over,” select the box for the series “Quarterly, seasonally adjusted.”

3. Click the box “Add to graph” immediately above the options. This will open a graph of the wage data.

Question

a. For Q1 1980, what was value of the real wage index?

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Correct answer: 321. To identify the value of the real wage index, move the cursor over the graph until you see Q1 1980 and then read the wage index value.

Question

b. For Q1 2016, what was the value of the real wage index?

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Correct answer: 346. To identify the value of the real wage index, move the cursor over the graph until you see Q1 2016 and then read the wage index value.
Data Exercises
Chapter 7
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Now you will utilize the FRED data to examine the wages of manufacturing workers in the United States. These data are available Federal Reserve Economic Data. To access the data:

1. Type “wages” and “manufacturing” in the search block and hit return.

2. For the first option, “Average hourly earnings of production and nonsupervisory employees,” select the box for the series “Seasonally adjusted.”

3. Select the box “Add to graph” immediately above the options. This will open a graph of the manufacturing wage data.

Question

a. What was the seasonally adjusted manufacturing wage in January 1980?

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Correct answer: $6.82. To identify the value of the seasonally adjusted manufacturing wage, move the cursor over the graph until you see Jan 1980 and then read the wage value.

Question

b. What was the seasonally-adjusted manufacturing wage in January 2016?

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Correct answer: $20.16. To identify the value of the seasonally adjusted manufacturing wage, move the cursor over the graph until you see Jan 2016 and then read the wage value.
Data Exercises
Chapter 7
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Comparing the data from the first two questions and Table 7-5, choose whether the following statements are correct or incorrect:

Question 7.1

The data show an increase in manufacturing wages over the period 1980–2016.
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Question 7.2

The data show an increase in real wages over the period 1980–2016.
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