Question 1

What is the formal definition of the unemployment rate?

Accepted Answer

The unemployment rate is the p

Question 2

A recession is often considered to be:

Accepted Answer

A) an economic downturn that persists for more than two consecutive quarters of the year. 
B) an economic downturn that persists for more than four consecutive quarters of the year. 
C) any period of more than six months in which unemployment is rising. 
D) any period when the unemployment rate exceeds 6 percent. 
A) an economic downturn that persists for more than two consecutive quarters of the year. 
B) an economic downturn that persists for more than four consecutive quarters of the year. 
C) any period of more than six months in which unemployment is rising. 
D) any period when the unemployment rate exceeds 6 percent.

Question 3

Per capita output would be certain to increase if:

Accepted Answer

A) both real output and population increase. 
B) both real output and population decrease. 
C) real output increases and population decreases. 
D) real output decreases and population increases. 
A) both real output and population increase. 
B) both real output and population decrease. 
C) real output increases and population decreases. 
D) real output decreases and population increases.

Question 4

Suppose there are 81.0 million people not in the labor force, 154.0 million in the civilian labor force, and 140.9 million employed. Based on these numbers, what is the unemployment rate?

Accepted Answer

A) 13.1 percent 
B) 9.3 percent 
C) 8.5 percent 
D) 5.5 percent 
A) 13.1 percent 
B) 9.3 percent 
C) 8.5 percent 
D) 5.5 percent

Question 5

The growth trend in the graph shown is depicted by:

Accepted Answer

A) A. 
B) B. 
C) C. 
D) D. 
A) A. 
B) B. 
C) C. 
D) D.

Question 6

The two frameworks conventional economists generally use to analyze macroeconomic issues are the:

Accepted Answer

A) inflation and the unemployment frameworks. 
B) short-run and the long-run frameworks. 
C) business cycle and the growth cycle frameworks. 
D) stagnationist and the Post-Keynesian frameworks. 
A) inflation and the unemployment frameworks. 
B) short-run and the long-run frameworks. 
C) business cycle and the growth cycle frameworks. 
D) stagnationist and the Post-Keynesian frameworks.

Question 7

What two numbers do you need to compute the unemployment rate?

Accepted Answer

A) The number of unemployed persons and the size of the population 
B) The number of unemployed persons and the number of discouraged workers 
C) The number of employed persons and the number of unemployed persons 
D) The number of persons in the labor force and the size of the population 
A) The number of unemployed persons and the size of the population 
B) The number of unemployed persons and the number of discouraged workers 
C) The number of employed persons and the number of unemployed persons 
D) The number of persons in the labor force and the size of the population

Question 8

During the business cycle, an economic upturn occurs:

Accepted Answer

A) at the peak of the business cycle. 
B) at the trough of the business cycle. 
C) in between the peak and trough of the business cycle. 
D) in between the trough and peak of the business cycle. 
A) at the peak of the business cycle. 
B) at the trough of the business cycle. 
C) in between the peak and trough of the business cycle. 
D) in between the trough and peak of the business cycle.

Question 9

Unemployment caused by people entering the job market and people quitting a job just long enough to look for and find another one is called:

Accepted Answer

A) structural unemployment. 
B) frictional unemployment. 
C) cyclical unemployment. 
D) are not counted in the unemployment rate. 
A) structural unemployment. 
B) frictional unemployment. 
C) cyclical unemployment. 
D) are not counted in the unemployment rate.

Question 10

The business cycle is:

Accepted Answer

A) the term used to describe fluctuations in output around its long-term trend. 
B) the length of time required by a firm to buy inputs and produce and sell output. 
C) the pattern of increases and decreases in the money supply. 
D) regular and predictable. 
A) the term used to describe fluctuations in output around its long-term trend. 
B) the length of time required by a firm to buy inputs and produce and sell output. 
C) the pattern of increases and decreases in the money supply. 
D) regular and predictable.

Question 11

Some economists talk about a nonaccelerating inflation rate of unemployment (NAIRU). The term the text uses for this concept is:

Accepted Answer

A) the supernatural rate of unemployment. 
B) cyclical unemployment. 
C) structural unemployment. 
D) the target rate of unemployment. 
A) the supernatural rate of unemployment. 
B) cyclical unemployment. 
C) structural unemployment. 
D) the target rate of unemployment.

Question 12

The total labor force is 100,000 out of a possible working age population of 160,000. The total number of unemployed is 8,000. What is the unemployment rate?

Accepted Answer

A) 5 percent 
B) 6 percent 
C) 7 percent 
D) 8 percent 
A) 5 percent 
B) 6 percent 
C) 7 percent 
D) 8 percent

Question 13

The lowest sustainable rate of unemployment that policy makers believe is achievable under existing conditions is:

Accepted Answer

A) zero. 
B) called the target rate of unemployment. 
C) called the optimal rate of unemployment. 
D) called cyclical unemployment. 
A) zero. 
B) called the target rate of unemployment. 
C) called the optimal rate of unemployment. 
D) called cyclical unemployment.

Question 14

Refer to the graph shown.   A peak occurs when the economy is at point:

Accepted Answer

A) A. 
B) B. 
C) C. 
D) D. 
A) A. 
B) B. 
C) C. 
D) D.

Question 15

Suppose a country's output is $440 billion and its population is 110 million. Now suppose that both its output and its population increase by 24 percent. As a result of these changes, its new level of per capita output will be:

Accepted Answer

A) $400. 
B) $440. 
C) $4,000. 
D) $4,400. 
A) $400. 
B) $440. 
C) $4,000. 
D) $4,400.

Question 16

Workers at a car-manufacturing plant are replaced by automated machinery. What type of unemployment best describes the workers' situation?

Accepted Answer

A) Cyclical unemployment 
B) Full unemployment 
C) Structural unemployment 
D) Frictional unemployment 
A) Cyclical unemployment 
B) Full unemployment 
C) Structural unemployment 
D) Frictional unemployment

Question 17

The long-run growth framework focuses on factors affecting:

Accepted Answer

A) incentives to spend. 
B) incentives to produce. 
C) both supply and demand. 
D) the business cycle. 
A) incentives to spend. 
B) incentives to produce. 
C) both supply and demand. 
D) the business cycle.

Question 18

The target rate of unemployment is defined as the:

Accepted Answer

A) highest sustainable rate of unemployment achievable under existing conditions. 
B) lowest sustainable rate of unemployment achievable under existing conditions. 
C) highest unemployment rate at which there is no cyclical or structural unemployment. 
D) lowest rate of unemployment that will eliminate the business cycle. 
A) highest sustainable rate of unemployment achievable under existing conditions. 
B) lowest sustainable rate of unemployment achievable under existing conditions. 
C) highest unemployment rate at which there is no cyclical or structural unemployment. 
D) lowest rate of unemployment that will eliminate the business cycle.

Question 19

According to Classical economists in the 1930s, a recession will end when:

Accepted Answer

A) government creates enough jobs for all of the unemployed. 
B) wages rise enough to eliminate unemployment. 
C) wages fall enough to eliminate unemployment. 
D) taxes are cut enough to stimulate private spending. 
A) government creates enough jobs for all of the unemployed. 
B) wages rise enough to eliminate unemployment. 
C) wages fall enough to eliminate unemployment. 
D) taxes are cut enough to stimulate private spending.

Question 20

If U.S. real GDP increases by 3.3 percent, we can infer that the United States experiences:

Accepted Answer

A) a recession. 
B) an upturn. 
C) a depression. 
D) a trough. 
A) a recession. 
B) an upturn. 
C) a depression. 
D) a trough.

Exam 24: Economic Growth, Business Cycles, and Unemployment

What is the formal definition of the unemployment rate?

A recession is often considered to be:

Per capita output would be certain to increase if:

Suppose there are 81.0 million people not in the labor force, 154.0 million in the civilian labor force, and 140.9 million employed. Based on these numbers, what is the unemployment rate?

The growth trend in the graph shown is depicted by:

The two frameworks conventional economists generally use to analyze macroeconomic issues are the:

What two numbers do you need to compute the unemployment rate?

During the business cycle, an economic upturn occurs:

Unemployment caused by people entering the job market and people quitting a job just long enough to look for and find another one is called:

The business cycle is:

Some economists talk about a nonaccelerating inflation rate of unemployment (NAIRU). The term the text uses for this concept is:

The total labor force is 100,000 out of a possible working age population of 160,000. The total number of unemployed is 8,000. What is the unemployment rate?

The lowest sustainable rate of unemployment that policy makers believe is achievable under existing conditions is:

Refer to the graph shown. A peak occurs when the economy is at point:

Suppose a country's output is $440 billion and its population is 110 million. Now suppose that both its output and its population increase by 24 percent. As a result of these changes, its new level of per capita output will be:

Workers at a car-manufacturing plant are replaced by automated machinery. What type of unemployment best describes the workers' situation?

The long-run growth framework focuses on factors affecting:

The target rate of unemployment is defined as the:

According to Classical economists in the 1930s, a recession will end when:

If U.S. real GDP increases by 3.3 percent, we can infer that the United States experiences:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Jobs and Unemployment

Inflation, Deflation, and Macro Policy

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

Filters