Question 1

The unemployment rate equals the number of persons

Accepted Answer

A) unemployed divided by the number employed. 
B) unemployed divided by the number in the labor force. 
C) unemployed divided by the population age 16 and over. 
D) not working divided by the population age 16 and over. 
A) unemployed divided by the number employed. 
B) unemployed divided by the number in the labor force. 
C) unemployed divided by the population age 16 and over. 
D) not working divided by the population age 16 and over.

Question 2

Unemployment caused by people voluntarily quitting work in order to seek more attractive employment is called

Accepted Answer

A) the natural rate of unemployment. 
B) full employment. 
C) cyclical unemployment. 
D) frictional unemployment. 
E) structural unemployment. 
A) the natural rate of unemployment. 
B) full employment. 
C) cyclical unemployment. 
D) frictional unemployment. 
E) structural unemployment.

Question 3

During a recession, which of the following will be true?

Accepted Answer

A) The actual rate of unemployment will be lower than the natural rate. 
B) Actual GDP will be lower than potential GDP. 
C) The employment/population ratio will increase substantially. 
D) Actual inflation will be higher than was anticipated. 
A) The actual rate of unemployment will be lower than the natural rate. 
B) Actual GDP will be lower than potential GDP. 
C) The employment/population ratio will increase substantially. 
D) Actual inflation will be higher than was anticipated.

Question 4

A general mismatch between the skills of unemployed workers and the skills needed by employers with job openings results in

Accepted Answer

A) frictional unemployment. 
B) structural unemployment. 
C) cyclical unemployment. 
D) a higher labor force participation rate. 
A) frictional unemployment. 
B) structural unemployment. 
C) cyclical unemployment. 
D) a higher labor force participation rate.

Question 5

The unemployment rate will increase whenever there is

Accepted Answer

A) an increase in the number of persons classified as unemployed. 
B) an increase in the number of unemployed persons relative to the size of the labor force. 
C) an increase in the size of the U.S.population and there is no change in the number of persons classified as employed. 
D) a reduction in the size of the labor force while the number of unemployed decreases. 
A) an increase in the number of persons classified as unemployed. 
B) an increase in the number of unemployed persons relative to the size of the labor force. 
C) an increase in the size of the U.S.population and there is no change in the number of persons classified as employed. 
D) a reduction in the size of the labor force while the number of unemployed decreases.

Question 6

Which one of the following persons would be considered unemployed?

Accepted Answer

A) a person not working who has given up searching for a job 
B) a part-time worker looking for a full-time job 
C) a construction worker who was laid off due to cold weather 
D) a full-time college student who is not a member of the labor force 
A) a person not working who has given up searching for a job 
B) a part-time worker looking for a full-time job 
C) a construction worker who was laid off due to cold weather 
D) a full-time college student who is not a member of the labor force

Question 7

The expansionary phase of the business cycle is characterized by

Accepted Answer

A) decreasing real output and increasing unemployment. 
B) decreasing real output and declining unemployment. 
C) increasing real output and increasing unemployment. 
D) increasing real output and declining unemployment. 
A) decreasing real output and increasing unemployment. 
B) decreasing real output and declining unemployment. 
C) increasing real output and increasing unemployment. 
D) increasing real output and declining unemployment.

Question 8

The type of unemployment caused by changes in the business cycle is

Accepted Answer

A) cyclical unemployment. 
B) natural unemployment. 
C) frictional unemployment. 
D) structural unemployment. 
A) cyclical unemployment. 
B) natural unemployment. 
C) frictional unemployment. 
D) structural unemployment.

Question 9

The primary cause of frictional unemployment is

Accepted Answer

A) the low level of the current minimum wages. 
B) the lack of and cost of acquiring information about available job opportunities. 
C) a mismatch of the skills of unemployed workers with the skills needed for job openings. 
D) discouraged workers who quit looking for a job after extended periods of unsuccessful job search. 
A) the low level of the current minimum wages. 
B) the lack of and cost of acquiring information about available job opportunities. 
C) a mismatch of the skills of unemployed workers with the skills needed for job openings. 
D) discouraged workers who quit looking for a job after extended periods of unsuccessful job search.

Question 10

Suppose an economy is operating at its maximum sustainable output rate. Neither recession nor economic boom are present. Which of the following would be true?

Accepted Answer

A) The economy would be considered at full employment. 
B) Actual GDP would exceed potential GDP. 
C) Actual unemployment will be less than the natural rate of unemployment. 
D) One hundred percent of the labor force is employed. 
A) The economy would be considered at full employment. 
B) Actual GDP would exceed potential GDP. 
C) Actual unemployment will be less than the natural rate of unemployment. 
D) One hundred percent of the labor force is employed.

Question 11

The stages of a business cycle, in order, are

Accepted Answer

A) expansion, contraction, recession, and boom. 
B) contraction, recession, expansion, and boom. 
C) boom, expansion, contraction, and recession. 
D) recession, contraction, expansion, and boom. 
A) expansion, contraction, recession, and boom. 
B) contraction, recession, expansion, and boom. 
C) boom, expansion, contraction, and recession. 
D) recession, contraction, expansion, and boom.

Question 12

Use the data below to answer the following question.   What is the unemployment rate of the economy?

Accepted Answer

A) 3.3 percent 
B) 4 percent 
C) 5 percent 
D) 5.3 percent 
A) 3.3 percent 
B) 4 percent 
C) 5 percent 
D) 5.3 percent

Question 13

Full employment is the rate of employment that results when

Accepted Answer

A) all labor resources of an economy are employed. 
B) there is efficient use of the labor force, with allowance made for normal unemployment due to dynamic changes and the structural conditions of the economy. 
C) cyclical unemployment is between 4 and 5 percent of the labor force. 
D) everybody who wants a job can find one. 
A) all labor resources of an economy are employed. 
B) there is efficient use of the labor force, with allowance made for normal unemployment due to dynamic changes and the structural conditions of the economy. 
C) cyclical unemployment is between 4 and 5 percent of the labor force. 
D) everybody who wants a job can find one.

Question 14

The reduction of structural unemployment in the United States' economy may require

Accepted Answer

A) an increase in the minimum wage. 
B) a reduction in government spending. 
C) an decrease in interest rates. 
D) increased spending on worker retraining. 
A) an increase in the minimum wage. 
B) a reduction in government spending. 
C) an decrease in interest rates. 
D) increased spending on worker retraining.

Question 15

Sophia is tending to her home garden while awaiting recall from her seasonal part-time job. The Bureau of Labor Statistics would classify Sophia as

Accepted Answer

A) not in the labor force. 
B) employed. 
C) unemployed. 
D) employed as a household worker. 
A) not in the labor force. 
B) employed. 
C) unemployed. 
D) employed as a household worker.

Question 16

Dr. Smith on the Channel 6 news says, "The recent figures showing that the unemployment rate is lower this quarter than last quarter are a definite sign that our economy is coming out of the recession." Dr. Jones on the Channel 8 news says, "Recent figures showing that employment is lower this quarter than it was last quarter are a definite sign that our economy is still plunging deeper into the recession."
a.Is it possible for both unemployment and employment to fall at the same time? What factor could account for the observed phenomenon?
b.In light of your answer, what do you think about the health of the economy relative to last quarter?

Accepted Answer

a.
Yes, if some of last period's unemplo

Question 17

Camila is a homemaker. Last week, she was busy with her normal household activities. How would the Bureau of Labor Statistics classify her?

Accepted Answer

A) A member of the civilian labor force who is employed. 
B) A member of the civilian labor force who is unemployed. 
C) A member of the civilian labor force who is underemployed. 
D) A discouraged worker who is not a member of the labor force. 
E) Not a member of the labor force. 
A) A member of the civilian labor force who is employed. 
B) A member of the civilian labor force who is unemployed. 
C) A member of the civilian labor force who is underemployed. 
D) A discouraged worker who is not a member of the labor force. 
E) Not a member of the labor force.

Question 18

Answer the following questions:
a.Describe the three types of unemployment.
b.Explain why economists believe some types of unemployment are efficient and some are not.Which ones are which?

Accepted Answer

a.
Frictional unemployment is unemployme

Question 19

Actual GDP will be below potential GDP

Accepted Answer

A) when the economy is at full employment. 
B) during an economic boom. 
C) when resources are fully utilized. 
D) during a recession. 
A) when the economy is at full employment. 
B) during an economic boom. 
C) when resources are fully utilized. 
D) during a recession.

Question 20

Gabriela, a brilliant new Ph.D. in economics, has turned down many job offers because she hopes eventually to teach at one of the top ten universities in her field. The type of unemployment she is experiencing is

Accepted Answer

A) frictional 
B) structural 
C) seasonal 
D) cyclical 
E) underemployment 
A) frictional 
B) structural 
C) seasonal 
D) cyclical 
E) underemployment

The unemployment rate equals the number of persons

Unemployment caused by people voluntarily quitting work in order to seek more attractive employment is called

During a recession, which of the following will be true?

A general mismatch between the skills of unemployed workers and the skills needed by employers with job openings results in

The unemployment rate will increase whenever there is

Which one of the following persons would be considered unemployed?

The expansionary phase of the business cycle is characterized by

The type of unemployment caused by changes in the business cycle is

The primary cause of frictional unemployment is

Suppose an economy is operating at its maximum sustainable output rate. Neither recession nor economic boom are present. Which of the following would be true?

The stages of a business cycle, in order, are

Use the data below to answer the following question. What is the unemployment rate of the economy?

Full employment is the rate of employment that results when

The reduction of structural unemployment in the United States' economy may require

Sophia is tending to her home garden while awaiting recall from her seasonal part-time job. The Bureau of Labor Statistics would classify Sophia as

Camila is a homemaker. Last week, she was busy with her normal household activities. How would the Bureau of Labor Statistics classify her?

Answer the following questions: a.Describe the three types of unemployment. b.Explain why economists believe some types of unemployment are efficient and some are not.Which ones are which?

Actual GDP will be below potential GDP

Gabriela, a brilliant new Ph.D. in economics, has turned down many job offers because she hopes eventually to teach at one of the top ten universities in her field. The type of unemployment she is experiencing is

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Taking the Nations Economic Pulse

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy, Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Filters

Exam 8: Economic Fluctuations, Unemployment, and Inflation

The unemployment rate equals the number of persons

Unemployment caused by people voluntarily quitting work in order to seek more attractive employment is called

During a recession, which of the following will be true?

A general mismatch between the skills of unemployed workers and the skills needed by employers with job openings results in

The unemployment rate will increase whenever there is

Which one of the following persons would be considered unemployed?

The expansionary phase of the business cycle is characterized by

The type of unemployment caused by changes in the business cycle is

The primary cause of frictional unemployment is

Suppose an economy is operating at its maximum sustainable output rate. Neither recession nor economic boom are present. Which of the following would be true?

The stages of a business cycle, in order, are

Use the data below to answer the following question. What is the unemployment rate of the economy?

Full employment is the rate of employment that results when

The reduction of structural unemployment in the United States' economy may require

Sophia is tending to her home garden while awaiting recall from her seasonal part-time job. The Bureau of Labor Statistics would classify Sophia as

Camila is a homemaker. Last week, she was busy with her normal household activities. How would the Bureau of Labor Statistics classify her?

Answer the following questions: a.Describe the three types of unemployment. b.Explain why economists believe some types of unemployment are efficient and some are not.Which ones are which?

Actual GDP will be below potential GDP

Gabriela, a brilliant new Ph.D. in economics, has turned down many job offers because she hopes eventually to teach at one of the top ten universities in her field. The type of unemployment she is experiencing is

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Taking the Nations Economic Pulse

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad-As Model

Fiscal Policy: the Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy, Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Filters