Question 1

Sharon was being treated unfairly by her boss, so she stormed off the job and two days later found another position. For two days, Sharon experienced:

Accepted Answer

A) cyclical unemployment. 
B) structural unemployment. 
C) seasonal unemployment. 
D) frictional unemployment. 
E) being out of the labor force. 
A) cyclical unemployment. 
B) structural unemployment. 
C) seasonal unemployment. 
D) frictional unemployment. 
E) being out of the labor force.

Question 2

Structural unemployment refers to short periods of unemployment needed to match jobs and job seekers.

Accepted Answer

A) True 
 B)False

Question 3

Business cycles are recurring periods of economic growth and decline in an economy's real GDP.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following people would be classified as fictionally unemployed?

Accepted Answer

A) Computer programmers who lost their jobs because of a recession. 
B) Construction workers who are on temporary layoff. 
C) Elementary school teachers who do not have summer jobs. 
D) Textile workers who lost their jobs because of new foreign competition. 
A) Computer programmers who lost their jobs because of a recession. 
B) Construction workers who are on temporary layoff. 
C) Elementary school teachers who do not have summer jobs. 
D) Textile workers who lost their jobs because of new foreign competition.

Question 5

The unemployment rate is the percentage of the:

Accepted Answer

A) civilian labor force that is unemployed or working part-time. 
B) civilian labor force that is unemployed. 
C) civilian labor force that is unemployed less the number of government workers. 
D) adult population that is unemployed. 
E) adult population that is unemployed or looking for a better job. 
A) civilian labor force that is unemployed or working part-time. 
B) civilian labor force that is unemployed. 
C) civilian labor force that is unemployed less the number of government workers. 
D) adult population that is unemployed. 
E) adult population that is unemployed or looking for a better job.

Question 6

A principal cause of the business cycle is the changes in total spending that occur in the overall economy.

Accepted Answer

A) True 
 B)False

Question 7

In an economic expansion, people used their charge cards to purchase many goods. Now the economy is in a recession and people must use much of their reduced incomes to pay back debts. If employees manufacturing the goods people used to buy are laid off, they will suffer from:

Accepted Answer

A) cyclical unemployment. 
B) structural unemployment. 
C) permanent unemployment. 
D) frictional unemployment. 
E) underemployment. 
A) cyclical unemployment. 
B) structural unemployment. 
C) permanent unemployment. 
D) frictional unemployment. 
E) underemployment.

Question 8

Jamal (now age 54)lost his job. He has very specialized skills that are no longer in demand. Jamal's unemployment is best classified as:

Accepted Answer

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

Question 9

Ryan Black does not work and has not looked for work because of a disability. He is:

Accepted Answer

A) a member of the civilian labor force who is employed. 
B) a member of the civilian labor force who is unemployed. 
C) a member of the civilian labor force who is underemployed. 
D) a discouraged worker who is not a member of the labor force. 
E) not a member of the labor force. 
A) a member of the civilian labor force who is employed. 
B) a member of the civilian labor force who is unemployed. 
C) a member of the civilian labor force who is underemployed. 
D) a discouraged worker who is not a member of the labor force. 
E) not a member of the labor force.

Question 10

Exclusion of which of the following tends to understate the true level of unemployment in the economy?

Accepted Answer

A) Children. 
B) Retired persons. 
C) Students. 
D) People who do not want to work. 
E) Discouraged workers. 
A) Children. 
B) Retired persons. 
C) Students. 
D) People who do not want to work. 
E) Discouraged workers.

Question 11

The unemployment rate will decrease whenever there is a(n):

Accepted Answer

A) increase in the number of persons classified as unemployed. 
B) decrease in the number of unemployed relative to the size of the labor force. 
C) decrease in the size of the population and there is no change in the number of persons classified as employed. 
D) reduction in the size of the labor force. 
E) decrease in the number of unemployed and the population does not change. 
A) increase in the number of persons classified as unemployed. 
B) decrease in the number of unemployed relative to the size of the labor force. 
C) decrease in the size of the population and there is no change in the number of persons classified as employed. 
D) reduction in the size of the labor force. 
E) decrease in the number of unemployed and the population does not change.

Question 12

An individual who is employed part time, but is looking for a full-time job, is classified as:

Accepted Answer

A) frictionally unemployed. 
B) cyclically unemployed. 
C) structurally unemployed. 
D) employed. 
A) frictionally unemployed. 
B) cyclically unemployed. 
C) structurally unemployed. 
D) employed.

Question 13

The economic cost of unemployment is the loss of potential output which can never be realized.

Accepted Answer

A) True 
 B)False

Question 14

Structural unemployment is unemployment caused by:

Accepted Answer

A) temporary changes in jobs. 
B) discrimination. 
C) the time required to match employers and workers. 
D) a mismatch between worker skills and employer requirements. 
A) temporary changes in jobs. 
B) discrimination. 
C) the time required to match employers and workers. 
D) a mismatch between worker skills and employer requirements.

Question 15

How do we measure economic growth?

Accepted Answer

A) Increases in the price level, as indicated by the GDP chain price index. 
B) Increases in nominal GDP. 
C) Increases in real GDP. 
D) Increases in the labor force. 
A) Increases in the price level, as indicated by the GDP chain price index. 
B) Increases in nominal GDP. 
C) Increases in real GDP. 
D) Increases in the labor force.

Question 16

The government's main statistic for forecasting business cycles is the index of coincident indicators.

Accepted Answer

A) True 
 B)False

Question 17

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 18

The period of growth in real GDP between the trough of the business cycle and the next peak is called the:

Accepted Answer

A) recessionary phase. 
B) recovery phase. 
C) contractionary phase. 
D) cyclical phase. 
A) recessionary phase. 
B) recovery phase. 
C) contractionary phase. 
D) cyclical phase.

Question 19

Any adult who does not have a job is counted as unemployed.

Accepted Answer

A) True 
 B)False

Question 20

A mismatch of the skills of unemployed workers and the skills required for existing jobs is defined as:

Accepted Answer

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

Exam 6: Business Cycles and Unemployment

Sharon was being treated unfairly by her boss, so she stormed off the job and two days later found another position. For two days, Sharon experienced:

Structural unemployment refers to short periods of unemployment needed to match jobs and job seekers.

Business cycles are recurring periods of economic growth and decline in an economy's real GDP.

Which of the following people would be classified as fictionally unemployed?

The unemployment rate is the percentage of the:

A principal cause of the business cycle is the changes in total spending that occur in the overall economy.

In an economic expansion, people used their charge cards to purchase many goods. Now the economy is in a recession and people must use much of their reduced incomes to pay back debts. If employees manufacturing the goods people used to buy are laid off, they will suffer from:

Jamal (now age 54)lost his job. He has very specialized skills that are no longer in demand. Jamal's unemployment is best classified as:

Ryan Black does not work and has not looked for work because of a disability. He is:

Exclusion of which of the following tends to understate the true level of unemployment in the economy?

The unemployment rate will decrease whenever there is a(n):

An individual who is employed part time, but is looking for a full-time job, is classified as:

The economic cost of unemployment is the loss of potential output which can never be realized.

Structural unemployment is unemployment caused by:

How do we measure economic growth?

The government's main statistic for forecasting business cycles is the index of coincident indicators.

The natural rate of unemployment occurs if there is no:

The period of growth in real GDP between the trough of the business cycle and the next peak is called the:

Any adult who does not have a job is counted as unemployed.

A mismatch of the skills of unemployed workers and the skills required for existing jobs is defined as:

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