Question 1

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 2

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 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.

Question 4

The duration of unemployment is not a leading indicator.

Accepted Answer

A) True 
 B)False

Question 5

Unemployment that results from fundamental technological changes in production, or from the substitution of new goods for customary ones, is:

Accepted Answer

A)  the natural rate of unemployment. 
B)  full employment. 
C)  cyclical unemployment. 
D)  frictional unemployment. 
E)  structural unemployment. 
A)  the natural rate of unemployment. 
B)  full employment. 
C)  cyclical unemployment. 
D)  frictional unemployment. 
E)  structural unemployment.

Question 6

Frictional unemployment refers to:

Accepted Answer

A)  people who are out of work and have no job skills. 
B)  short periods of unemployment needed to match jobs and job seekers. 
C)  people who spend relatively long periods out of work. 
D)  unemployment related to the ups and downs of the business cycle. 
A)  people who are out of work and have no job skills. 
B)  short periods of unemployment needed to match jobs and job seekers. 
C)  people who spend relatively long periods out of work. 
D)  unemployment related to the ups and downs of the business cycle.

Question 7

The official unemployment rate can be criticized for both understating and overstating the true number of unemployed.

Accepted Answer

A) True 
 B)False

Question 8

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 9

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

Accepted Answer

A) True 
 B)False

Question 10

Which of the following will most likely occur during the expansionary phase of a business cycle?

Accepted Answer

A)  Real GDP rises, and unemployment falls. 
B)  Real GDP declines, and inflation rises. 
C)  Interest rates rise, and the number of business failures rise. 
D)  Inflation rises, and employment falls. 
A)  Real GDP rises, and unemployment falls. 
B)  Real GDP declines, and inflation rises. 
C)  Interest rates rise, and the number of business failures rise. 
D)  Inflation rises, and employment falls.

Question 11

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 12

The civilian labor force includes only the employed.

Accepted Answer

A) True 
 B)False

Question 13

Martin Shore lost his job when General Motors closed down its local plant. He has been visiting the personnel offices of the other factories in the area, looking for a new job. 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 14

Which of the following will most likely occur during the recessionary phase of a business cycle?

Accepted Answer

A)  Real GDP rises, and the unemployment rate falls. 
B)  Real GDP declines, and the rate of inflation rises. 
C)  The sales of most businesses decline, and the unemployment rate rises. 
D)  Inflation rises, and employment/population ratio falls. 
A)  Real GDP rises, and the unemployment rate falls. 
B)  Real GDP declines, and the rate of inflation rises. 
C)  The sales of most businesses decline, and the unemployment rate rises. 
D)  Inflation rises, and employment/population ratio falls.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Structural unemployment is a special type of cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

Unemployment that is of a short duration to allow time to find a new job is:

Accepted Answer

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

Question 19

The unemployment rate measures the percentage of:

Accepted Answer

A)  people in the civilian labor force who are without jobs and actively seeking jobs. 
B)  the U.S. population that is out of work and actively seeking a job. 
C)  the civilian noninstitutionalized population that is out of work and actively seeking a job. 
D)  people over age 21 who are without jobs and actively seeking jobs. 
A)  people in the civilian labor force who are without jobs and actively seeking jobs. 
B)  the U.S. population that is out of work and actively seeking a job. 
C)  the civilian noninstitutionalized population that is out of work and actively seeking a job. 
D)  people over age 21 who are without jobs and actively seeking jobs.

Question 20

Exhibit 12-1  Business cycle   In Exhibit 12-1, 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.

Exam 12: Business Cycles and Unemployment

The unemployment rate is the percentage of the:

The economy is fully employed when there is no:

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

The duration of unemployment is not a leading indicator.

Unemployment that results from fundamental technological changes in production, or from the substitution of new goods for customary ones, is:

Frictional unemployment refers to:

The official unemployment rate can be criticized for both understating and overstating the true number of unemployed.

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

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

Which of the following will most likely occur during the expansionary phase of a business cycle?

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

The civilian labor force includes only the employed.

Martin Shore lost his job when General Motors closed down its local plant. He has been visiting the personnel offices of the other factories in the area, looking for a new job. He is:

Which of the following will most likely occur during the recessionary phase of a business cycle?

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

Structural unemployment is a special type of cyclical unemployment.

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

Unemployment that is of a short duration to allow time to find a new job is:

The unemployment rate measures the percentage of:

Exhibit 12-1 Business cycle In Exhibit 12-1, the recovery phase of the business cycle can be represented by points:

Introducing the Economic Way of Thinking

Production Possibilities, Opportunity Cost, and Economic Growth

Market Demand and Supply

Markets in Action

Price Elasticity of Demand

Production Costs

Perfect Competition

Monopoly

Monopolistic Competition and Oligopoly

Labor Markets and Income Distribution

Gross Domestic Product

Inflation

Aggregate Demand and Supply

Fiscal Policy

The Public Sector

Federal Deficits, Surpluses, and the National Debt

Money and the Federal Reserve System

Money Creation

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

International Trade and Finance

Economies in Transition

Growth and the Less-Developed Countries

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