Question 1

When the actual rate of unemployment is equal to the natural rate of unemployment, we conclude that there is no cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 2

In the absence of minimum wages, efficiency wages, or labor unions, a decline in the demand for labor will likely result in _____ if wages are flexible.

Accepted Answer

A)  higher levels of employment 
B)  no changes in employment 
C)  a lower level of employment but likely no change in the unemployment rate 
D)  a lower level of employment and a higher unemployment rate 
A)  higher levels of employment 
B)  no changes in employment 
C)  a lower level of employment but likely no change in the unemployment rate 
D)  a lower level of employment and a higher unemployment rate

Question 3

Use the following to answer questions:  
-(Figure: The Labor Market) Use Figure: The Labor Market. The unemployment rate at the equilibrium wage rate is _____%.

Accepted Answer

A)  0 
B)  50 
C)  80 
D)  15 
A)  0 
B)  50 
C)  80 
D)  15

Question 4

According to the Congressional Budget Office, the natural rate of unemployment:

Accepted Answer

A)  has continually declined since 1950. 
B)  was at its lowest by the end of the 1970s. 
C)  has continually risen since 1950. 
D)  rose until the end of the 1970s and has declined since then. 
A)  has continually declined since 1950. 
B)  was at its lowest by the end of the 1970s. 
C)  has continually risen since 1950. 
D)  rose until the end of the 1970s and has declined since then.

Question 5

Use the following to answer questions:  
-(Table: The Consumer Price Index (CPI)) Use Table: The Consumer Price Index (CPI). The inflation rate between 2011 and 2012 was _____%.

Accepted Answer

A)  10 
B)  3.7 
C)  1.4 
D)  24.6 
A)  10 
B)  3.7 
C)  1.4 
D)  24.6

Question 6

If the population of the United States is 260 million, the labor force is 130 million, and 120 million workers are employed, the rate of unemployment is _____%.

Accepted Answer

A)  7.7 
B)  8.3 
C)  50 
D)  92 
A)  7.7 
B)  8.3 
C)  50 
D)  92

Question 7

When the demand for labor is falling and employers have committed to high wages, _____ unemployment will result.

Accepted Answer

A)  frictional 
B)  cyclical 
C)  permanent 
D)  structural 
A)  frictional 
B)  cyclical 
C)  permanent 
D)  structural

Question 8

Suppose that immigration laws are relaxed and many workers from other nations enter the U.S. labor force. The _____ labor will _____.

Accepted Answer

A)  demand for; increase 
B)  demand for; decrease 
C)  supply of; decrease 
D)  supply of; increase 
A)  demand for; increase 
B)  demand for; decrease 
C)  supply of; decrease 
D)  supply of; increase

Question 9

The unemployment rate is the ratio of the unemployed to the labor force.

Accepted Answer

A) True 
 B)False

Question 10

Cyclical unemployment:

Accepted Answer

A)  rises during a recession. 
B)  falls during a recession. 
C)  rises during an expansion. 
D)  is a part of natural unemployment. 
A)  rises during a recession. 
B)  falls during a recession. 
C)  rises during an expansion. 
D)  is a part of natural unemployment.

Question 11

A survey reveals that, on a small island, 1,000 people have jobs, 200 people don't have jobs but are looking for jobs, and 200 people are neither working nor looking for work. The unemployment rate on the island is _____%.

Accepted Answer

A)  12.5 
B)  16.7 
C)  20 
D)  30 
A)  12.5 
B)  16.7 
C)  20 
D)  30

Question 12

Increases in unemployment benefits:

Accepted Answer

A)  increase the natural rate of unemployment. 
B)  decrease the natural rate of unemployment. 
C)  affect everyone the same by increasing the natural rate of unemployment. 
D)  affect everyone the same by decreasing the natural rate of unemployment. 
A)  increase the natural rate of unemployment. 
B)  decrease the natural rate of unemployment. 
C)  affect everyone the same by increasing the natural rate of unemployment. 
D)  affect everyone the same by decreasing the natural rate of unemployment.

Question 13

In 2002, the French adopted the British pound as their national currency.

Accepted Answer

A) True 
 B)False

Question 14

Use the following to answer questions:  
-(Table: Population Data for Estill County) Use Table: Population Data for Estill County. What is the unemployment rate?

Accepted Answer

A)  64% 
B)  48% 
C)  17% 
D)  6% 
A)  64% 
B)  48% 
C)  17% 
D)  6%

Question 15

Use the following to answer questions:  
-(Figure: The Labor Market) Use Figure: The Labor Market. The size of the labor force at the equilibrium wage rate is:

Accepted Answer

A)  80,000. 
B)  110,000. 
C)  100,000. 
D)  200,000. 
A)  80,000. 
B)  110,000. 
C)  100,000. 
D)  200,000.

Question 16

Deflation is a(n):

Accepted Answer

A)  decrease in the purchasing power of a unit of money. 
B)  appreciation of the nation's currency. 
C)  decrease in the average level of prices. 
D)  increase in the average level of prices. 
A)  decrease in the purchasing power of a unit of money. 
B)  appreciation of the nation's currency. 
C)  decrease in the average level of prices. 
D)  increase in the average level of prices.

Question 17

The real wage is the wage multiplied by the price level.

Accepted Answer

A) True 
 B)False

Question 18

When the unemployment rate is very low, most of it tends to be:

Accepted Answer

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

Question 19

Use the following to answer questions:  
-(Table: Employment Data) Use Table: Employment Data. If marginally attached workers are included in the labor force and in the unemployment rate, the unemployment rate is _____%.

Accepted Answer

A)  39.4 
B)  30.3 
C)  9.1 
D)  6.25 
A)  39.4 
B)  30.3 
C)  9.1 
D)  6.25

Question 20

Suppose that there are 70 million people in the labor force, of whom 60 million are employed. The unemployment rate is:

Accepted Answer

A)  7%. 
B)  10%. 
C)  14.29%. 
D)  4.2%. 
A)  7%. 
B)  10%. 
C)  14.29%. 
D)  4.2%.

When the actual rate of unemployment is equal to the natural rate of unemployment, we conclude that there is no cyclical unemployment.

In the absence of minimum wages, efficiency wages, or labor unions, a decline in the demand for labor will likely result in _____ if wages are flexible.

Use the following to answer questions: -(Figure: The Labor Market) Use Figure: The Labor Market. The unemployment rate at the equilibrium wage rate is _____%.

According to the Congressional Budget Office, the natural rate of unemployment:

Use the following to answer questions: -(Table: The Consumer Price Index (CPI)) Use Table: The Consumer Price Index (CPI). The inflation rate between 2011 and 2012 was _____%.

If the population of the United States is 260 million, the labor force is 130 million, and 120 million workers are employed, the rate of unemployment is _____%.

When the demand for labor is falling and employers have committed to high wages, _____ unemployment will result.

Suppose that immigration laws are relaxed and many workers from other nations enter the U.S. labor force. The _ labor will _.

The unemployment rate is the ratio of the unemployed to the labor force.

Cyclical unemployment:

A survey reveals that, on a small island, 1,000 people have jobs, 200 people don't have jobs but are looking for jobs, and 200 people are neither working nor looking for work. The unemployment rate on the island is _____%.

Increases in unemployment benefits:

In 2002, the French adopted the British pound as their national currency.

Use the following to answer questions: -(Table: Population Data for Estill County) Use Table: Population Data for Estill County. What is the unemployment rate?

Use the following to answer questions: -(Figure: The Labor Market) Use Figure: The Labor Market. The size of the labor force at the equilibrium wage rate is:

Deflation is a(n):

The real wage is the wage multiplied by the price level.

When the unemployment rate is very low, most of it tends to be:

Use the following to answer questions: -(Table: Employment Data) Use Table: Employment Data. If marginally attached workers are included in the labor force and in the unemployment rate, the unemployment rate is _____%.

Suppose that there are 70 million people in the labor force, of whom 60 million are employed. The unemployment rate is:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

GDP and the CPI: Tracking the Macroeconomy

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

Exam 8: Unemployment and Inflation

When the actual rate of unemployment is equal to the natural rate of unemployment, we conclude that there is no cyclical unemployment.

In the absence of minimum wages, efficiency wages, or labor unions, a decline in the demand for labor will likely result in _____ if wages are flexible.

Use the following to answer questions: -(Figure: The Labor Market) Use Figure: The Labor Market. The unemployment rate at the equilibrium wage rate is _____%.

According to the Congressional Budget Office, the natural rate of unemployment:

Use the following to answer questions: -(Table: The Consumer Price Index (CPI)) Use Table: The Consumer Price Index (CPI). The inflation rate between 2011 and 2012 was _____%.

If the population of the United States is 260 million, the labor force is 130 million, and 120 million workers are employed, the rate of unemployment is _____%.

When the demand for labor is falling and employers have committed to high wages, _____ unemployment will result.

Suppose that immigration laws are relaxed and many workers from other nations enter the U.S. labor force. The _____ labor will _____.

The unemployment rate is the ratio of the unemployed to the labor force.

Cyclical unemployment:

A survey reveals that, on a small island, 1,000 people have jobs, 200 people don't have jobs but are looking for jobs, and 200 people are neither working nor looking for work. The unemployment rate on the island is _____%.

Increases in unemployment benefits:

In 2002, the French adopted the British pound as their national currency.

Use the following to answer questions: -(Table: Population Data for Estill County) Use Table: Population Data for Estill County. What is the unemployment rate?

Use the following to answer questions: -(Figure: The Labor Market) Use Figure: The Labor Market. The size of the labor force at the equilibrium wage rate is:

Deflation is a(n):

The real wage is the wage multiplied by the price level.

When the unemployment rate is very low, most of it tends to be:

Use the following to answer questions: -(Table: Employment Data) Use Table: Employment Data. If marginally attached workers are included in the labor force and in the unemployment rate, the unemployment rate is _____%.

Suppose that there are 70 million people in the labor force, of whom 60 million are employed. The unemployment rate is:

First Principles

Economic Models: Trade-Offs and Trade

Supply and Demand

Price Controls and Quotas: Meddling With Markets

International Trade

Macroeconomics: the Big Picture

GDP and the CPI: Tracking the Macroeconomy

Long-Run Economic Growth

Savings, Investment Spending, and the Financial Syst

Income and Expenditure

Aggregate Demand and Aggregate Supply

Fiscal Policy

Money, Banking, and the Federal Reserve System

Monetary Policy

Inflation, Disinflation, and Deflation

Macroeconomics: Events and Ideas

International Macroeconomics

Filters

Suppose that immigration laws are relaxed and many workers from other nations enter the U.S. labor force. The _ labor will _.