Exam 29: Business Cycles, Unemployment, and Inflation

In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?

Suppose there are 5 million unemployed workers seeking jobs.After a period of time, 1 million of them become discouraged over their job prospects and cease to look for work.As a result of this, all else equal, the official unemployment rate would

Which of the following statements about employment growth soon after the Great Recession is not true?

Ricardo lost his job last year when his company downsized and laid off middle-level managers.He tried to find another job for a year but was unsuccessful and quit looking for work.Which individual is cyclically unemployed?

The rate of unemployment tends to be lowest for

Which of the following measures the changes in the prices of a "market basket" of some 300 goods and services purchased by typical urban consumers?

Economists who are willing to accept mild inflation consider it to be a necessary by-product of high and growing spending that produces high levels of output, full employment, and economic growth.

Assume that there is a fixed rate of interest on contracts for borrowers and lenders.If unanticipated inflation occurs in the economy, then

If the Consumer Price Index rises from 300 to 333 in a particular year, the rate of inflation in that year is

Inflation means that the prices of all items in the economy are increasing.Difficulty: 02 Medium Learning Objective: 29-03 Explain how inflation is measured and distinguish between cost-push inflation and demand-pull inflation.Topic: Inflation

When the economy goes into a recession and firms require less labor, managers tend to

An annual rate of inflation of 7 percent will double the price level in about 15 years.

Unlike demand-pull inflation, cost-push inflation

As applied to the price level, the "rule of 70" indicates that the number of years required for the price level to double can be found by

In which of the following industries or sectors of the economy will business cycle fluctuations likely have the greatest effect on output?

The relationship between the size of the negative GDP gap and the unemployment rate is

If the nominal interest rate is 5 percent and the real interest rate is 2 percent, then the inflation premium is

For a given amount of nominal income, the real income will

After the Great Recession of 2007-09 ended, real GDP increased

The business cycle is so named because upswings and downswings in business activity are predictably equal in terms of duration and intensity.