Question 1

All of the following are true about Okun's Law except

Accepted Answer

A) It quantifies the relationship between unemployment and the production possibilities curve. 
B) It allows a dollar value to be assigned to the cost of unemployment. 
C) It indicates that there is a negative 2:1 relationship between output and unemployment. 
D) It quantifies the relationship between unemployment and labor force growth. 
A) It quantifies the relationship between unemployment and the production possibilities curve. 
B) It allows a dollar value to be assigned to the cost of unemployment. 
C) It indicates that there is a negative 2:1 relationship between output and unemployment. 
D) It quantifies the relationship between unemployment and labor force growth.

Question 2

Jack graduated from college last month,but he has not yet started looking for a job.Jack is

Accepted Answer

A) Frictionally unemployed. 
B) Structurally unemployed. 
C) A discouraged worker and is part of the unemployment statistic. 
D) Not part of the labor force and is not counted in the unemployment rate. 
A) Frictionally unemployed. 
B) Structurally unemployed. 
C) A discouraged worker and is part of the unemployment statistic. 
D) Not part of the labor force and is not counted in the unemployment rate.

Question 3

Those that work part-time and do not desire full-time employment are referred to as

Accepted Answer

A) Employed. 
B) The phantom unemployed. 
C) Underemployed. 
D) Discouraged workers. 
A) Employed. 
B) The phantom unemployed. 
C) Underemployed. 
D) Discouraged workers.

Question 4

Which of the following groups could increase in size and cause a significantly higher unemployment rate?

Accepted Answer

A) Discouraged workers. 
B) Underemployed workers. 
C) Phantom unemployed. 
D) Children under the age of 16. 
A) Discouraged workers. 
B) Underemployed workers. 
C) Phantom unemployed. 
D) Children under the age of 16.

Question 5

How is foreign trade in inputs similar to trade in outputs?

Accepted Answer

A) U.S.producers buy (outsource)cheap foreign inputs (labor)while U.S.consumers buy cheap foreign outputs (U.S.imports). 
B) U.S.consumers sell (outsource)cheap foreign inputs (labor)while U.S.producers sell cheap foreign outputs (U.S.imports). 
C) U.S.producers sell (outsource)cheap foreign inputs (labor)while U.S.consumers buy cheap foreign outputs (U.S.imports). 
D) All of the choices are correct. 
A) U.S.producers buy (outsource)cheap foreign inputs (labor)while U.S.consumers buy cheap foreign outputs (U.S.imports). 
B) U.S.consumers sell (outsource)cheap foreign inputs (labor)while U.S.producers sell cheap foreign outputs (U.S.imports). 
C) U.S.producers sell (outsource)cheap foreign inputs (labor)while U.S.consumers buy cheap foreign outputs (U.S.imports). 
D) All of the choices are correct.

Question 6

Frictional unemployment could result from each of the following except

Accepted Answer

A) The reallocation of employees to growing industries. 
B) The inability of people to find work during certain seasons of the year. 
C) The opportunity for people to leave jobs in which they are underemployed. 
D) None of the choices are correct. 
A) The reallocation of employees to growing industries. 
B) The inability of people to find work during certain seasons of the year. 
C) The opportunity for people to leave jobs in which they are underemployed. 
D) None of the choices are correct.

Question 7

Studies have shown that unemployment causes

Accepted Answer

A) Increased expenditure on food. 
B) More spending on child care because more mothers go to work. 
C) Increased health problems. 
D) Little impact since most people receive unemployment benefits. 
A) Increased expenditure on food. 
B) More spending on child care because more mothers go to work. 
C) Increased health problems. 
D) Little impact since most people receive unemployment benefits.

Question 8

When workers begin retiring at earlier ages,the production possibilities curve shifts outward.

Accepted Answer

A) True 
 B)False

Question 9

Jim's job was transferred 800 miles away.Although his employer will let him keep his job if he goes to the new factory,Jim cannot move.Jim is

Accepted Answer

A) Frictionally unemployed. 
B) Structurally unemployed. 
C) Cyclically unemployed. 
D) Seasonally unemployed. 
A) Frictionally unemployed. 
B) Structurally unemployed. 
C) Cyclically unemployed. 
D) Seasonally unemployed.

Question 10

Which of the following unemployment categories is most directly related to the rate of growth in real GDP?

Accepted Answer

A) Structural. 
B) Seasonal. 
C) Frictional. 
D) Cyclical. 
A) Structural. 
B) Seasonal. 
C) Frictional. 
D) Cyclical.

Question 11

Individuals who are working part-time while seeking full-time employment are classified as

Accepted Answer

A) Unemployed. 
B) Underemployed. 
C) Discouraged workers. 
D) Phantom unemployed. 
A) Unemployed. 
B) Underemployed. 
C) Discouraged workers. 
D) Phantom unemployed.

Question 12

The natural rate of unemployment includes

Accepted Answer

A) Seasonal and cyclical unemployment only. 
B) Cyclical and frictional unemployment only. 
C) Structural and seasonal unemployment only. 
D) Frictional and structural unemployment only. 
A) Seasonal and cyclical unemployment only. 
B) Cyclical and frictional unemployment only. 
C) Structural and seasonal unemployment only. 
D) Frictional and structural unemployment only.

Question 13

All of the following are true about outsourcing of jobs except that it

Accepted Answer

A) Occurs because labor is cheaper in other countries. 
B) Increases specialization. 
C) Reduces costs and increases profits for companies. 
D) Ultimately leaves the United States worse off. 
A) Occurs because labor is cheaper in other countries. 
B) Increases specialization. 
C) Reduces costs and increases profits for companies. 
D) Ultimately leaves the United States worse off.

Question 14

Suppose there are 4 million people in an economy that are classified as unemployed.After a more thorough investigation,it becomes obvious that 200,000 of these people are actually phantom unemployed.As a result of this discovery,the unemployment rate will

Accepted Answer

A) Decrease. 
B) Increase. 
C) Remain unchanged until the unemployed find a job. 
D) Increase initially but decrease when the phantom unemployed receive unemployment benefits. 
A) Decrease. 
B) Increase. 
C) Remain unchanged until the unemployed find a job. 
D) Increase initially but decrease when the phantom unemployed receive unemployment benefits.

Question 15

People are not part of the labor force when they

Accepted Answer

A) Go on vacation. 
B) Are old enough to work but choose not to work. 
C) Suffer from a temporary illness that keeps them away from their job. 
D) None of the choices are correct. 
A) Go on vacation. 
B) Are old enough to work but choose not to work. 
C) Suffer from a temporary illness that keeps them away from their job. 
D) None of the choices are correct.

Question 16

If cyclical unemployment is zero,the economy is

Accepted Answer

A) Outside the production possibilities curve. 
B) Inside the production possibilities curve. 
C) On the fixed production possibilities curve. 
D) On the production possibilities curve that shifts inward. 
A) Outside the production possibilities curve. 
B) Inside the production possibilities curve. 
C) On the fixed production possibilities curve. 
D) On the production possibilities curve that shifts inward.

Question 17

When the labor force participation rate is declining,the

Accepted Answer

A) Unemployment rate is rising faster than the total population rate. 
B) Percentage of the working-age population that is outside the labor force is declining. 
C) Percentage of the working-age population that is willing and able to work is declining. 
D) Percentage of the total population that is employed is rising. 
A) Unemployment rate is rising faster than the total population rate. 
B) Percentage of the working-age population that is outside the labor force is declining. 
C) Percentage of the working-age population that is willing and able to work is declining. 
D) Percentage of the total population that is employed is rising.

Question 18

After Christmas,retail sales fall and many clerks are laid off until the following Christmas.This is an example of which of the following types of unemployment?

Accepted Answer

A) Structural unemployment. 
B) Frictional unemployment. 
C) Cyclical unemployment. 
D) Seasonal unemployment. 
A) Structural unemployment. 
B) Frictional unemployment. 
C) Cyclical unemployment. 
D) Seasonal unemployment.

Question 19

Samantha recently quit her job at the university because she is looking for another job for which she is qualified in a small town.Samantha is

Accepted Answer

A) Frictionally unemployed. 
B) Structurally unemployed. 
C) A discouraged worker and is part of the unemployment statistic. 
D) Not part of the labor force and does not contribute to the unemployment rate. 
A) Frictionally unemployed. 
B) Structurally unemployed. 
C) A discouraged worker and is part of the unemployment statistic. 
D) Not part of the labor force and does not contribute to the unemployment rate.

Question 20

Which of the following was a stated goal of the Humphrey-Hawkins Act?

Accepted Answer

A) Zero percent unemployment rate. 
B) Zero percent inflation rate. 
C) 4 percent unemployment rate. 
D) 4 percent inflation rate. 
A) Zero percent unemployment rate. 
B) Zero percent inflation rate. 
C) 4 percent unemployment rate. 
D) 4 percent inflation rate.

Exam 6: Unemployment

All of the following are true about Okun's Law except

Jack graduated from college last month,but he has not yet started looking for a job.Jack is

Those that work part-time and do not desire full-time employment are referred to as

Which of the following groups could increase in size and cause a significantly higher unemployment rate?

How is foreign trade in inputs similar to trade in outputs?

Frictional unemployment could result from each of the following except

Studies have shown that unemployment causes

When workers begin retiring at earlier ages,the production possibilities curve shifts outward.

Jim's job was transferred 800 miles away.Although his employer will let him keep his job if he goes to the new factory,Jim cannot move.Jim is

Which of the following unemployment categories is most directly related to the rate of growth in real GDP?

Individuals who are working part-time while seeking full-time employment are classified as

The natural rate of unemployment includes

All of the following are true about outsourcing of jobs except that it

Suppose there are 4 million people in an economy that are classified as unemployed.After a more thorough investigation,it becomes obvious that 200,000 of these people are actually phantom unemployed.As a result of this discovery,the unemployment rate will

People are not part of the labor force when they

If cyclical unemployment is zero,the economy is

When the labor force participation rate is declining,the

After Christmas,retail sales fall and many clerks are laid off until the following Christmas.This is an example of which of the following types of unemployment?

Samantha recently quit her job at the university because she is looking for another job for which she is qualified in a small town.Samantha is

Which of the following was a stated goal of the Humphrey-Hawkins Act?

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

National Income Accounting

Inflation

The Business Cycle

Aggregate Demand

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty

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