Question 1

Which one of the following people would not be considered a part of the labor force?

Accepted Answer

A) A steel worker who was laid off last week and is seeking work. 
B) A steel worker who was laid off last year and is no longer seeking work. 
C) A student who also works part-time. 
D) A member of the U.S. Navy. 
E) A retired college professor paid to teach a summer course. 
A) A steel worker who was laid off last week and is seeking work. 
B) A steel worker who was laid off last year and is no longer seeking work. 
C) A student who also works part-time. 
D) A member of the U.S. Navy. 
E) A retired college professor paid to teach a summer course. B

Question 2

The business cycle is the periodic but recurrent fluctuations in real GDP.

Accepted Answer

A) True 
 B)False  True

Question 3

Which of the following groups of people are members of the labor force?

Accepted Answer

A) People in prison. 
B) Full-time students. 
C) People over 16 years of age who are employed. 
D) Anyone not actively looking for work during the past 30 days. 
A) People in prison. 
B) Full-time students. 
C) People over 16 years of age who are employed. 
D) Anyone not actively looking for work during the past 30 days. C

Question 4

Whom does the Bureau of Labor Statistics include in the discouraged workers group?

Accepted Answer

A) All those between 16 and 65 who are neither disabled nor in an institution and are also neither employed nor seeking employment. 
B) Civilian labor force members who have chosen early retirement because they dislike their work or think the pay is too low. 
C) Members of the noninstitutional population who say they want to be employed but aren't searching for a job. 
D) Members of the civilian labor force who are looking for a job but cannot find one. 
E) Anyone in the population who is not working. 
A) All those between 16 and 65 who are neither disabled nor in an institution and are also neither employed nor seeking employment. 
B) Civilian labor force members who have chosen early retirement because they dislike their work or think the pay is too low. 
C) Members of the noninstitutional population who say they want to be employed but aren't searching for a job. 
D) Members of the civilian labor force who are looking for a job but cannot find one. 
E) Anyone in the population who is not working.

Question 5

The duration of unemployment is not a leading indicator.

Accepted Answer

A) True 
 B)False

Question 6

Cyclical unemployment is caused by:

Accepted Answer

A) shifts in the job skills required in the economy. 
B) seasonal layoffs. 
C) declines in real GDP. 
D) cyclical changes in the job skills among workers. 
A) shifts in the job skills required in the economy. 
B) seasonal layoffs. 
C) declines in real GDP. 
D) cyclical changes in the job skills among workers.

Question 7

Which one of the following people is not a member of the labor force?

Accepted Answer

A) A full-time student who devotes all her time to her classes. 
B) A person who works 30 hours a week at Burger King and goes to school at night. 
C) The man who was fired last week and is searching for a new job. 
D) The President of the United States. 
E) A professional athlete. 
A) A full-time student who devotes all her time to her classes. 
B) A person who works 30 hours a week at Burger King and goes to school at night. 
C) The man who was fired last week and is searching for a new job. 
D) The President of the United States. 
E) A professional athlete.

Question 8

Economic growth is measured by the annual percentage increase in a nation's level of:

Accepted Answer

A) nominal GDP. 
B) real GDP. 
C) real GDP deflator. 
D) economic indicators. 
A) nominal GDP. 
B) real GDP. 
C) real GDP deflator. 
D) economic indicators.

Question 9

When people become unemployed because of a higher minimum wage, this type of unemployment is called:

Accepted Answer

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

Question 10

Find the size of the civilian labor force from the following data: frictional unemployment = 150, structural unemployment = 200, cyclical unemployment = 225, discouraged workers = 25, underemployed workers = 75, fully employed workers = 850, total population = 2,000.

Accepted Answer

A) 1,425 
B) 1,450 
C) 1,500 
D) 1,525 
E) 2,000 
A) 1,425 
B) 1,450 
C) 1,500 
D) 1,525 
E) 2,000

Question 11

Sally lost her job when her company went out of business because of a recession. This is an example of:

Accepted Answer

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

Question 12

In the United States, the unemployment rate for blacks is roughly the same as the unemployment rate for whites.

Accepted Answer

A) True 
 B)False

Question 13

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 14

The term "recovery" refers to the maximum point of the business cycle.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following people is counted in the labor force?

Accepted Answer

A) Jerry, who lost his job and last looked for work three months ago. 
B) Bob, who holds an MBA in management but can only find part-time employment at a fast-food restaurant. 
C) Phil, who would like to work as a stockbroker but is now a househusband. 
D) Mickey, who thinks he could easily become a millionaire, despite the opinion of the psychiatrist at the state hospital where he is a patient. 
E) Donna Jean, age 90, who is enjoying her retirement in Montana. 
A) Jerry, who lost his job and last looked for work three months ago. 
B) Bob, who holds an MBA in management but can only find part-time employment at a fast-food restaurant. 
C) Phil, who would like to work as a stockbroker but is now a househusband. 
D) Mickey, who thinks he could easily become a millionaire, despite the opinion of the psychiatrist at the state hospital where he is a patient. 
E) Donna Jean, age 90, who is enjoying her retirement in Montana.

Question 16

Exhibit 6-1 Business cycle   In Exhibit 6-1, the recovery phase of the business cycle can be represented by points:

Accepted Answer

A) A. 
B) C. 
C) E. 
D) C to E. 
E) E to G. 
A) A. 
B) C. 
C) E. 
D) C to E. 
E) E to G.

Question 17

The economy is fully employed when there is no:

Accepted Answer

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

Question 18

The phase in the business cycle in which real GDP declines is called a:

Accepted Answer

A) trendline. 
B) peak. 
C) recession. 
D) recovery. 
E) trough. 
A) trendline. 
B) peak. 
C) recession. 
D) recovery. 
E) trough.

Question 19

Unemployment that is caused by a mismatch of the demand for workers with certain skills and the skills of unemployed workers is:

Accepted Answer

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

Question 20

Part-time workers who want full-time work are counted as only partially employed in the official unemployment statistic.

Accepted Answer

A) True 
 B)False

Exam 6: Business Cycles and Unemployment

Which one of the following people would not be considered a part of the labor force?

The business cycle is the periodic but recurrent fluctuations in real GDP.

Which of the following groups of people are members of the labor force?

Whom does the Bureau of Labor Statistics include in the discouraged workers group?

The duration of unemployment is not a leading indicator.

Cyclical unemployment is caused by:

Which one of the following people is not a member of the labor force?

Economic growth is measured by the annual percentage increase in a nation's level of:

When people become unemployed because of a higher minimum wage, this type of unemployment is called:

Find the size of the civilian labor force from the following data: frictional unemployment = 150, structural unemployment = 200, cyclical unemployment = 225, discouraged workers = 25, underemployed workers = 75, fully employed workers = 850, total population = 2,000.

Sally lost her job when her company went out of business because of a recession. This is an example of:

In the United States, the unemployment rate for blacks is roughly the same as the unemployment rate for whites.

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

The term "recovery" refers to the maximum point of the business cycle.

Which of the following people is counted in the labor force?

Exhibit 6-1 Business cycle In Exhibit 6-1, the recovery phase of the business cycle can be represented by points:

The economy is fully employed when there is no:

The phase in the business cycle in which real GDP declines is called a:

Unemployment that is caused by a mismatch of the demand for workers with certain skills and the skills of unemployed workers is:

Part-time workers who want full-time work are counted as only partially employed in the official unemployment statistic.

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Gross Domestic Product

Inflation

The Keynesian Model

The Keynesian Model in Action

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

Monetary Policy

The Phillips Curve and Expectations Theory

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

Applying Graphs to Economics

Consumer Surplus, Producer Surplus, and Market Efficiency

the Self-Correcting Aggregate Demand and Supply Model

Policy Disputes Using the Self-Correcting Aggregate Demand and Supply Model

Filters