Question 1

Policies that affect aggregate expenditures are primarily relevant to the:

Accepted Answer

A) short-run business cycle framework. 
B) long-run growth framework. 
C) short-run growth framework. 
D) long-run business cycle framework. 
A) short-run business cycle framework. 
B) long-run growth framework. 
C) short-run growth framework. 
D) long-run business cycle framework.

Question 2

In September 2010, the NBER's Business Cycle Dating Committee decided that the recession that began in December of 2007 had ended and that the lowest point of production was July of 2009. The NBER does not use a popular definition of recession-two quarters of falling GDP-but looks at a variety of monthly statistics to date business cycles. In business cycle terminology, what does July 2009 mark?

Accepted Answer

A) The trough of the cycle 
B) The peak of the cycle 
C) The depression of the cycle 
D) The duration of the recession 
A) The trough of the cycle 
B) The peak of the cycle 
C) The depression of the cycle 
D) The duration of the recession

Question 3

Technological change is most likely to affect:

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 4

What is the business cycle? How is it linked to a secular trend? Describe the four phases of the business cycle.How are these phases linked to the concepts of a "boom",a "recession" and an "expansion"?

Accepted Answer

A business cycle is the upward or downwa

Question 5

Which of the following contributes to structural unemployment?

Accepted Answer

A) A general short-run downturn in the economy. 
B) People quitting a job just long enough to look for and find another one. 
C) People over 65 who don't really want to work. 
D) People losing a job when their skills become obsolete due to technological innovations. 
A) A general short-run downturn in the economy. 
B) People quitting a job just long enough to look for and find another one. 
C) People over 65 who don't really want to work. 
D) People losing a job when their skills become obsolete due to technological innovations.

Question 6

How does the target rate of unemployment relate to potential income?

Accepted Answer

Potential output is the output that woul

Question 7

The unemployment rate is the number of people without a job:

Accepted Answer

A) divided by the population. 
B) and looking for work divided by the population. 
C) divided by the labor force. 
D) and looking for work divided by the labor force. 
A) divided by the population. 
B) and looking for work divided by the population. 
C) divided by the labor force. 
D) and looking for work divided by the labor force.

Question 8

Fluctuations around the long-term growth rate are called:

Accepted Answer

A) recessions. 
B) depressions. 
C) expansions. 
D) business cycles. 
A) recessions. 
B) depressions. 
C) expansions. 
D) business cycles.

Question 9

If a country's output and population are, respectively, $500 billion and 200 million, then its per capita output is:

Accepted Answer

A) $250. 
B) $1,000. 
C) $2,500. 
D) $24,000. 
A) $250. 
B) $1,000. 
C) $2,500. 
D) $24,000.

Question 10

Another term for what the text calls the "target rate of unemployment" is:

Accepted Answer

A) Keynesian unemployment. 
B) nominal unemployment. 
C) real unemployment. 
D) the natural rate of unemployment. 
A) Keynesian unemployment. 
B) nominal unemployment. 
C) real unemployment. 
D) the natural rate of unemployment.

Question 11

Over the last ten years which geographic area or country had the highest per capita growth rate?

Accepted Answer

A) China 
B) Western Europe 
C) North America 
D) Latin America 
A) China 
B) Western Europe 
C) North America 
D) Latin America

Question 12

Business cycles are generally considered in:

Accepted Answer

A) the short-run framework. 
B) the long-run framework. 
C) both the short-run and long-run frameworks. 
D) neither the short-run nor the long-run frameworks. 
A) the short-run framework. 
B) the long-run framework. 
C) both the short-run and long-run frameworks. 
D) neither the short-run nor the long-run frameworks.

Question 13

What is the difference between the short-run framework and the long-run framework? How does each relate to supply and demand? Explain.

Accepted Answer

Each framework deals with different prob

Question 14

Policy issues of business cycles are considered in a long-run framework.

Accepted Answer

A) True 
 B)False

Question 15

The Classical economists argued that:

Accepted Answer

A) a market economy will not experience unemployment in the short run. 
B) if unemployment occurs, it will cure itself because wages will fall. 
C) aggregate expenditures may be too low. 
D) if inflation occurs it will cure itself because prices, wages, and interest rates will rise. 
A) a market economy will not experience unemployment in the short run. 
B) if unemployment occurs, it will cure itself because wages will fall. 
C) aggregate expenditures may be too low. 
D) if inflation occurs it will cure itself because prices, wages, and interest rates will rise.

Question 16

The terms business cycle and structural stagnation can be used interchangeably.

Accepted Answer

A) True 
 B)False

Question 17

Why are Classical economists likely to think the unemployment rate reported by the BLS overstates true unemployment?

Accepted Answer

Classical economists feel that being wit

Question 18

The number of people over age 16 in an economy willing and able to work, is known as the:

Accepted Answer

A) labor force participation rate. 
B) unemployment rate. 
C) labor force. 
D) employment force. 
A) labor force participation rate. 
B) unemployment rate. 
C) labor force. 
D) employment force.

Question 19

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, how many people are counted as unemployed?

Accepted Answer

A) 81.0 million 
B) 73.0 million 
C) 59.9 million 
D) 13.1 million 
A) 81.0 million 
B) 73.0 million 
C) 59.9 million 
D) 13.1 million

Question 20

If the labor force is 90 million and the number of people who are looking for jobs but cannot find them is 9 million, the unemployment rate is:

Accepted Answer

A) 9 percent. 
B) 10 percent. 
C) 81 percent. 
D) 91 percent. 
A) 9 percent. 
B) 10 percent. 
C) 81 percent. 
D) 91 percent.

Exam 24: Economic Growth, Business Cycles, and Unemployment

Policies that affect aggregate expenditures are primarily relevant to the:

Technological change is most likely to affect:

What is the business cycle? How is it linked to a secular trend? Describe the four phases of the business cycle.How are these phases linked to the concepts of a "boom",a "recession" and an "expansion"?

Which of the following contributes to structural unemployment?

How does the target rate of unemployment relate to potential income?

The unemployment rate is the number of people without a job:

Fluctuations around the long-term growth rate are called:

If a country's output and population are, respectively, $500 billion and 200 million, then its per capita output is:

Another term for what the text calls the "target rate of unemployment" is:

Over the last ten years which geographic area or country had the highest per capita growth rate?

Business cycles are generally considered in:

What is the difference between the short-run framework and the long-run framework? How does each relate to supply and demand? Explain.

Policy issues of business cycles are considered in a long-run framework.

The Classical economists argued that:

The terms business cycle and structural stagnation can be used interchangeably.

Why are Classical economists likely to think the unemployment rate reported by the BLS overstates true unemployment?

The number of people over age 16 in an economy willing and able to work, is known as the:

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, how many people are counted as unemployed?

If the labor force is 90 million and the number of people who are looking for jobs but cannot find them is 9 million, the unemployment rate is:

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

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