Question 1

An example of frictional unemployment is a(n):

Accepted Answer

A) textile worker permanently laid off due to jobs lost to imports. 
B) engineer permanently laid off due to advances in technology. 
C) fast-food restaurant worker who quits work and attends college. 
D) computer programmer who leaves one job and accepts a new job. 
A) textile worker permanently laid off due to jobs lost to imports. 
B) engineer permanently laid off due to advances in technology. 
C) fast-food restaurant worker who quits work and attends college. 
D) computer programmer who leaves one job and accepts a new job.

Question 2

Exhibit 6-2 Unemployment categories   Find the BLS's rate of unemployment 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) 17.5 percent 
B) 23.3 percent 
C) 24.6 percent 
D) 28.8 percent 
E) 38.3 percent 
A) 17.5 percent 
B) 23.3 percent 
C) 24.6 percent 
D) 28.8 percent 
E) 38.3 percent

Question 3

Louise is unemployed due to a decrease in the demand for workers with a knowledge of a certain word processing language. This is an example of:

Accepted Answer

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

Question 4

It is difficult for cyclically unemployed individuals to find jobs because:

Accepted Answer

A) they do not meet the qualifications required for the available jobs. 
B) the economy is in a recession. 
C) they quit their last job and employers view them with suspicion. 
D) they have not looked long enough to find a job. 
A) they do not meet the qualifications required for the available jobs. 
B) the economy is in a recession. 
C) they quit their last job and employers view them with suspicion. 
D) they have not looked long enough to find a job.

Question 5

Sam is a musician who is out of work because electronic equipment replaced live musicians. This is an example of:

Accepted Answer

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

Question 6

Which of the following offers an example of frictional unemployment?

Accepted Answer

A) The rise in unemployment for stable workers after the development of gasoline-powered automobiles and the resulting long-tern decline in horse-and-buggy transportation. 
B) The rise in unemployment among farm workers after harvest. 
C) Unemployment resulting from the business cycle. 
D) None of the above are correct. 
A) The rise in unemployment for stable workers after the development of gasoline-powered automobiles and the resulting long-tern decline in horse-and-buggy transportation. 
B) The rise in unemployment among farm workers after harvest. 
C) Unemployment resulting from the business cycle. 
D) None of the above are correct.

Question 7

Recovery is the phase of the business cycle during which real GDP reaches its maximum.

Accepted Answer

A) True 
 B)False

Question 8

The number of people officially unemployed is not the same as the number of people who can't find a job because:

Accepted Answer

A) the armed forces is included. 
B) some people have jobs but continue to look for a better one. 
C) some people who can't find a job become discouraged and quit looking. 
D) none of these. 
A) the armed forces is included. 
B) some people have jobs but continue to look for a better one. 
C) some people who can't find a job become discouraged and quit looking. 
D) none of these.

Question 9

Which of the following statements is true ?

Accepted Answer

A) The four phases of the business cycle, in order, are: peak, recovery, trough, recession. 
B) When unemployment is rising then real GDP is rising. 
C) The economic problem typically associated with a recovery is rising unemployment. 
D) Full employment exists in an economy when the unemployment rate equals the sum of frictional, and structural unemployment rates. 
A) The four phases of the business cycle, in order, are: peak, recovery, trough, recession. 
B) When unemployment is rising then real GDP is rising. 
C) The economic problem typically associated with a recovery is rising unemployment. 
D) Full employment exists in an economy when the unemployment rate equals the sum of frictional, and structural unemployment rates.

Question 10

John Steinbeck's Cannery Row describes a character who takes his own life because of poor job prospects. If he was an unemployed person who gave up looking for work, he would be considered:

Accepted Answer

A) chronically unemployed. 
B) a discouraged worker. 
C) a member of the labor force. 
D) frictionally unemployed. 
A) chronically unemployed. 
B) a discouraged worker. 
C) a member of the labor force. 
D) frictionally unemployed.

Question 11

Consider an economy made up of 100 people, 60 of whom old jobs, 10 of whom are looking for work, and 15 of whom are retired. The number counted as unemployed is:

Accepted Answer

A) 10. 
B) 15. 
C) 40. 
D) 30. 
E) 90. 
A) 10. 
B) 15. 
C) 40. 
D) 30. 
E) 90.

Question 12

Which of the following groups of people are counted as employed?

Accepted Answer

A) People who work at least one hour a week. 
B) People who work at least 15 hours a week as unpaid employees of a family business. 
C) People who are out of work due to bad weather. 
D) All of these are counted as employed. 
A) People who work at least one hour a week. 
B) People who work at least 15 hours a week as unpaid employees of a family business. 
C) People who are out of work due to bad weather. 
D) All of these are counted as employed.

Question 13

An example of structural unemployment is a(n):

Accepted Answer

A) textile worker who quits one job and waits for the new job to begin. 
B) engineer permanently laid off due to advances in technology. 
C) computer programmer who becomes rich and leaves the labor force. 
D) All of these. 
A) textile worker who quits one job and waits for the new job to begin. 
B) engineer permanently laid off due to advances in technology. 
C) computer programmer who becomes rich and leaves the labor force. 
D) All of these.

Question 14

Structural unemployment refers to unemployment resulting from:

Accepted Answer

A) technological change. 
B) being in the wrong geographical location 
C) taking the time to find the best job. 
D) seasonal decreases in demand for labor. 
E) a recession in the economy. 
A) technological change. 
B) being in the wrong geographical location 
C) taking the time to find the best job. 
D) seasonal decreases in demand for labor. 
E) a recession in the economy.

Question 15

A decrease in aggregate demand and the subsequent cutbacks in production lead to:

Accepted Answer

A) frictional unemployment. 
B) cyclical unemployment. 
C) cost-push unemployment. 
D) structural unemployment. 
E) transitory unemployment. 
A) frictional unemployment. 
B) cyclical unemployment. 
C) cost-push unemployment. 
D) structural unemployment. 
E) transitory unemployment.

Question 16

Exhibit 6-3 Unemployment categories   According to data in Exhibit 6-3 and assuming the total number of workers is 8,400, the civilian labor force is:

Accepted Answer

A) 7,550. 
B) 8,000. 
C) 8,400. 
D) 8,800. 
E) 9,250. 
A) 7,550. 
B) 8,000. 
C) 8,400. 
D) 8,800. 
E) 9,250.

Question 17

The four phases of a single business cycle are, in order, the trough, followed by a recovery, then a recession, ending with a peak.

Accepted Answer

A) True 
 B)False

Question 18

The GDP gap is the difference between:

Accepted Answer

A) frictional unemployment and actual real GDP. 
B) unemployment rate and real GDP deflator. 
C) actual real GDP and full-employment real GDP . 
D) full-employment real GDP and real GDP deflator. 
A) frictional unemployment and actual real GDP. 
B) unemployment rate and real GDP deflator. 
C) actual real GDP and full-employment real GDP . 
D) full-employment real GDP and real GDP deflator.

Question 19

A general rule is that economy is experiencing a recession when:

Accepted Answer

A) real GDP declines for at least three months. 
B) real GDP declines for at least nine months. 
C) nominal GDP declines for at least nine months. 
D) real GDP declines for at least six months. 
E) nominal GDP declines for at least six months. 
A) real GDP declines for at least three months. 
B) real GDP declines for at least nine months. 
C) nominal GDP declines for at least nine months. 
D) real GDP declines for at least six months. 
E) nominal GDP declines for at least six months.

Question 20

The civilian labor force consists of:

Accepted Answer

A) all civilians over the age of 16. 
B) the employed plus the unemployed who are not in the military. 
C) only individuals who are actually at work during a given week. 
D) civilians who are not in prisons or mental hospitals. 
A) all civilians over the age of 16. 
B) the employed plus the unemployed who are not in the military. 
C) only individuals who are actually at work during a given week. 
D) civilians who are not in prisons or mental hospitals.

Exam 6: Business Cycles and Unemployment

An example of frictional unemployment is a(n):

Exhibit 6-2 Unemployment categories Find the BLS's rate of unemployment 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.

Louise is unemployed due to a decrease in the demand for workers with a knowledge of a certain word processing language. This is an example of:

It is difficult for cyclically unemployed individuals to find jobs because:

Sam is a musician who is out of work because electronic equipment replaced live musicians. This is an example of:

Which of the following offers an example of frictional unemployment?

Recovery is the phase of the business cycle during which real GDP reaches its maximum.

The number of people officially unemployed is not the same as the number of people who can't find a job because:

Which of the following statements is true ?

John Steinbeck's Cannery Row describes a character who takes his own life because of poor job prospects. If he was an unemployed person who gave up looking for work, he would be considered:

Consider an economy made up of 100 people, 60 of whom old jobs, 10 of whom are looking for work, and 15 of whom are retired. The number counted as unemployed is:

Which of the following groups of people are counted as employed?

An example of structural unemployment is a(n):

Structural unemployment refers to unemployment resulting from:

A decrease in aggregate demand and the subsequent cutbacks in production lead to:

Exhibit 6-3 Unemployment categories According to data in Exhibit 6-3 and assuming the total number of workers is 8,400, the civilian labor force is:

The four phases of a single business cycle are, in order, the trough, followed by a recovery, then a recession, ending with a peak.

The GDP gap is the difference between:

A general rule is that economy is experiencing a recession when:

The civilian labor force consists of:

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