Question 1

Which of the following will most likely occur during the expansionary phase of a business cycle?

Accepted Answer

A) Real GDP rises, and unemployment falls. 
B) Real GDP declines, and inflation rises. 
C) Interest rates rise, and the number of business failures rise. 
D) Inflation rises, and employment falls. 
A) Real GDP rises, and unemployment falls. 
B) Real GDP declines, and inflation rises. 
C) Interest rates rise, and the number of business failures rise. 
D) Inflation rises, and employment falls.

Question 2

Terrance loses his job and immediately begins looking for another. Other things the same, the unemployment rate

Accepted Answer

A) increases, and the labor-force participation rate decreases. 
B) increases, and the labor-force participation rate is unaffected. 
C) is unaffected, and the labor-force participation rate increases. 
D) decreases, and the labor-force participation rate is unaffected. 
A) increases, and the labor-force participation rate decreases. 
B) increases, and the labor-force participation rate is unaffected. 
C) is unaffected, and the labor-force participation rate increases. 
D) decreases, and the labor-force participation rate is unaffected.

Question 3

Suppose the population (age 16 and over) of Madagascar is 200 million; 9 million are unemployed, and 111 million hold jobs. Indicate the rate of unemployment and the employment/population ratio of Madagascar.

Accepted Answer

A) The unemployment rate is 4.5 percent, and the employment/population ratio is 55.5 percent. 
B) The unemployment rate is 7.5 percent, and the employment/population ratio is 60 percent. 
C) The unemployment rate is 7.5 percent, and the employment/population ratio is 55.5 percent. 
D) The unemployment rate is 8.1 percent, and the employment/population ratio is 60 percent. 
A) The unemployment rate is 4.5 percent, and the employment/population ratio is 55.5 percent. 
B) The unemployment rate is 7.5 percent, and the employment/population ratio is 60 percent. 
C) The unemployment rate is 7.5 percent, and the employment/population ratio is 55.5 percent. 
D) The unemployment rate is 8.1 percent, and the employment/population ratio is 60 percent.

Question 4

Which of the following will most likely occur during the expansionary phase of a business cycle?

Accepted Answer

A) Real GDP declines, and the rate of unemployment increases. 
B) Real GDP declines, and the rate of inflation is unchanged. 
C) Real GDP increases, and rate of unemployment falls. 
D) Real GDP is unchanged, and the rate of inflation is unchanged. 
A) Real GDP declines, and the rate of unemployment increases. 
B) Real GDP declines, and the rate of inflation is unchanged. 
C) Real GDP increases, and rate of unemployment falls. 
D) Real GDP is unchanged, and the rate of inflation is unchanged.

Question 5

If an economy is at its potential output level, which of the following is not true?

Accepted Answer

A) The economy is at its full-employment output level. 
B) Unemployment is at the natural level. 
C) The price level is zero. 
D) The output level being produced can be sustained indefinitely given the economy's resources and technology. 
E) The only unemployment is frictional or structural. 
A) The economy is at its full-employment output level. 
B) Unemployment is at the natural level. 
C) The price level is zero. 
D) The output level being produced can be sustained indefinitely given the economy's resources and technology. 
E) The only unemployment is frictional or structural.

Question 6

Which of the following would be classified as unemployed?

Accepted Answer

A) mothers who choose to stay at home with their preschool-age children 
B) retirees who are no longer working at a job 
C) students attending school full time 
D) a 20-year old looking for her first job 
A) mothers who choose to stay at home with their preschool-age children 
B) retirees who are no longer working at a job 
C) students attending school full time 
D) a 20-year old looking for her first job

Question 7

How would the Bureau of Labor Statistics classify a college graduate who is not currently working but recently turned down an offer for employment at $10 an hour in order to keep looking for a better job?

Accepted Answer

A) not in the labor force 
B) employed 
C) unemployed 
D) on temporary absence from school 
A) not in the labor force 
B) employed 
C) unemployed 
D) on temporary absence from school

Question 8

Which of the following is most indicative of a recession?

Accepted Answer

A) a decline in unemployment 
B) a rise in inflation 
C) a decline in real GDP 
D) an increase in the interest rate 
A) a decline in unemployment 
B) a rise in inflation 
C) a decline in real GDP 
D) an increase in the interest rate

Question 9

Isabella is on a temporary layoff from her factory job. If Isabella participates in the BLS survey, she will be classified as

Accepted Answer

A) unemployed and in the labor force. 
B) unemployed and out of the labor force. 
C) employed and in the labor force. 
D) employed and out of the labor force. 
A) unemployed and in the labor force. 
B) unemployed and out of the labor force. 
C) employed and in the labor force. 
D) employed and out of the labor force.

Question 10

During a period of rapid growth in output,

Accepted Answer

A) employment generally increases and unemployment decreases. 
B) employment generally decreases and unemployment increases. 
C) both employment and unemployment generally increase. 
D) both employment and unemployment generally decrease. 
A) employment generally increases and unemployment decreases. 
B) employment generally decreases and unemployment increases. 
C) both employment and unemployment generally increase. 
D) both employment and unemployment generally decrease.

Question 11

When individuals are unemployed because they lack the qualifications to fill available jobs, this is called

Accepted Answer

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

Question 12

Which type of unemployment is most likely to help the economy become more efficient?

Accepted Answer

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

Question 13

Suppose the population (age 16 and over) of Guatemala is 100 million; 5 million are unemployed, and 70 million hold jobs. The employment/population ratio of Guatemala is

Accepted Answer

A) 5 percent. 
B) 65 percent. 
C) 70 percent. 
D) 85 percent. 
A) 5 percent. 
B) 65 percent. 
C) 70 percent. 
D) 85 percent.

Question 14

Potential output is the

Accepted Answer

A) maximum rate of output that can ever be achieved. 
B) highest rate of output that has ever been achieved in the past. 
C) maximum sustainable output level consistent with the economy's resource base and current institutions. 
D) the rate of output present when the general level of prices is unstable. 
A) maximum rate of output that can ever be achieved. 
B) highest rate of output that has ever been achieved in the past. 
C) maximum sustainable output level consistent with the economy's resource base and current institutions. 
D) the rate of output present when the general level of prices is unstable.

Question 15

A person is considered unemployed if she is

Accepted Answer

A) working at a part-time job. 
B) taking a vacation from a job. 
C) working at a full-time job in a foreign country. 
D) not working but is actively looking for work. 
A) working at a part-time job. 
B) taking a vacation from a job. 
C) working at a full-time job in a foreign country. 
D) not working but is actively looking for work.

Question 16

The natural rate of unemployment occurs if there is no

Accepted Answer

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

Question 17

Suppose the population (age 16 and over) of Angola is 100 million; 5 million are unemployed, and 70 million hold jobs. The labor force participation rate in Angola is

Accepted Answer

A) 5 percent. 
B) 65 percent. 
C) 70 percent. 
D) 75 percent. 
A) 5 percent. 
B) 65 percent. 
C) 70 percent. 
D) 75 percent.

Question 18

High and variable rates of inflation will

Accepted Answer

A) distort the information delivered by market prices. 
B) encourage people to spend more time producing and less time trying to protect their wealth. 
C) decrease the risks that accompany the undertaking of long-term investment projects. 
D) promote economic growth and the efficient use of resources. 
A) distort the information delivered by market prices. 
B) encourage people to spend more time producing and less time trying to protect their wealth. 
C) decrease the risks that accompany the undertaking of long-term investment projects. 
D) promote economic growth and the efficient use of resources.

Question 19

Suppose the population (age 16 and over) of Panama is 50 million; 4 million are unemployed, and 36 million hold jobs. What are the rates of unemployment and labor force participation of Panama?

Accepted Answer

A) Unemployment is 10 percent, and labor force participation is 80 percent. 
B) Unemployment is 10 percent, and labor force participation is 75 percent. 
C) Unemployment is 11 percent, and labor force participation is 80 percent. 
D) Unemployment is 11 percent, and labor force participation is 90 percent. 
A) Unemployment is 10 percent, and labor force participation is 80 percent. 
B) Unemployment is 10 percent, and labor force participation is 75 percent. 
C) Unemployment is 11 percent, and labor force participation is 80 percent. 
D) Unemployment is 11 percent, and labor force participation is 90 percent.

Question 20

Which of the following individuals would be considered unemployed by the official government definition?

Accepted Answer

A) Alexander, a mathematician, who returned to graduate school after failing to find a job the last four months. 
B) Abigail, a medical student, who is still in college and is not working. 
C) Elizabeth, who is employed part-time but desires a full-time job. 
D) Darius, an auto worker vacationing in Florida during a layoff at a General Motors plant. 
A) Alexander, a mathematician, who returned to graduate school after failing to find a job the last four months. 
B) Abigail, a medical student, who is still in college and is not working. 
C) Elizabeth, who is employed part-time but desires a full-time job. 
D) Darius, an auto worker vacationing in Florida during a layoff at a General Motors plant.

Which of the following will most likely occur during the expansionary phase of a business cycle?

Terrance loses his job and immediately begins looking for another. Other things the same, the unemployment rate

Suppose the population (age 16 and over) of Madagascar is 200 million; 9 million are unemployed, and 111 million hold jobs. Indicate the rate of unemployment and the employment/population ratio of Madagascar.

Which of the following will most likely occur during the expansionary phase of a business cycle?

If an economy is at its potential output level, which of the following is not true?

Which of the following would be classified as unemployed?

How would the Bureau of Labor Statistics classify a college graduate who is not currently working but recently turned down an offer for employment at $10 an hour in order to keep looking for a better job?

Which of the following is most indicative of a recession?

Isabella is on a temporary layoff from her factory job. If Isabella participates in the BLS survey, she will be classified as

During a period of rapid growth in output,

When individuals are unemployed because they lack the qualifications to fill available jobs, this is called

Which type of unemployment is most likely to help the economy become more efficient?

Suppose the population (age 16 and over) of Guatemala is 100 million; 5 million are unemployed, and 70 million hold jobs. The employment/population ratio of Guatemala is

Potential output is the

A person is considered unemployed if she is

The natural rate of unemployment occurs if there is no

Suppose the population (age 16 and over) of Angola is 100 million; 5 million are unemployed, and 70 million hold jobs. The labor force participation rate in Angola is

High and variable rates of inflation will

Suppose the population (age 16 and over) of Panama is 50 million; 4 million are unemployed, and 36 million hold jobs. What are the rates of unemployment and labor force participation of Panama?

Which of the following individuals would be considered unemployed by the official government definition?

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

Which of the following will most likely occur during the expansionary phase of a business cycle?

Terrance loses his job and immediately begins looking for another. Other things the same, the unemployment rate

Suppose the population (age 16 and over) of Madagascar is 200 million; 9 million are unemployed, and 111 million hold jobs. Indicate the rate of unemployment and the employment/population ratio of Madagascar.

Which of the following will most likely occur during the expansionary phase of a business cycle?

If an economy is at its potential output level, which of the following is not true?

Which of the following would be classified as unemployed?

How would the Bureau of Labor Statistics classify a college graduate who is not currently working but recently turned down an offer for employment at $10 an hour in order to keep looking for a better job?

Which of the following is most indicative of a recession?

Isabella is on a temporary layoff from her factory job. If Isabella participates in the BLS survey, she will be classified as

During a period of rapid growth in output,

When individuals are unemployed because they lack the qualifications to fill available jobs, this is called

Which type of unemployment is most likely to help the economy become more efficient?

Suppose the population (age 16 and over) of Guatemala is 100 million; 5 million are unemployed, and 70 million hold jobs. The employment/population ratio of Guatemala is

Potential output is the

A person is considered unemployed if she is

The natural rate of unemployment occurs if there is no

Suppose the population (age 16 and over) of Angola is 100 million; 5 million are unemployed, and 70 million hold jobs. The labor force participation rate in Angola is

High and variable rates of inflation will

Suppose the population (age 16 and over) of Panama is 50 million; 4 million are unemployed, and 36 million hold jobs. What are the rates of unemployment and labor force participation of Panama?

Which of the following individuals would be considered unemployed by the official government definition?

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