Question 1

Which of the following is true ?

Accepted Answer

A)  The GDP gap is the difference between actual real GDP and full-employment real GDP. 
B)  We desire economic growth because it increases the nation's standard of living. 
C)  Economic growth is measured by the annual percentage increase in a nation's real GDP. 
D)  Discouraged workers are a reason critics say the unemployment rate is understated. 
E)  All of the above are true. 
A)  The GDP gap is the difference between actual real GDP and full-employment real GDP. 
B)  We desire economic growth because it increases the nation's standard of living. 
C)  Economic growth is measured by the annual percentage increase in a nation's real GDP. 
D)  Discouraged workers are a reason critics say the unemployment rate is understated. 
E)  All of the above are true.

Question 2

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 3

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 4

Actual GDP will be below potential GDP:

Accepted Answer

A)  when the economy is at full employment. 
B)  during an economic boom. 
C)  when resources are fully utilized. 
D)  during a recession. 
A)  when the economy is at full employment. 
B)  during an economic boom. 
C)  when resources are fully utilized. 
D)  during a recession.

Question 5

When the rate of cyclical unemployment is zero, the:

Accepted Answer

A)  natural rate of unemployment must also be zero. 
B)  rate of frictional unemployment must be negative. 
C)  economy must have entered a recessionary stage. 
D)  Keynesian aggregate supply curve must be horizontal. 
E)  economy is considered to be at full employment. 
A)  natural rate of unemployment must also be zero. 
B)  rate of frictional unemployment must be negative. 
C)  economy must have entered a recessionary stage. 
D)  Keynesian aggregate supply curve must be horizontal. 
E)  economy is considered to be at full employment.

Question 6

The business cycle consists of four phases. At the top we have:

Accepted Answer

A)  recovery, followed by peak, and then recession followed by a recession. 
B)  recovery, followed by a recession, and then peak followed by recession. 
C)  peak, then an upturn followed by a recession, and then recession. 
D)  peak, then a recession followed by expansionary, and then recession. 
E)  peak, then a recession followed by recession, and finally, expansionary. 
A)  recovery, followed by peak, and then recession followed by a recession. 
B)  recovery, followed by a recession, and then peak followed by recession. 
C)  peak, then an upturn followed by a recession, and then recession. 
D)  peak, then a recession followed by expansionary, and then recession. 
E)  peak, then a recession followed by recession, and finally, expansionary.

Question 7

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 8

A general mismatch between the skills of unemployed workers and the skills needed by employers with job openings results in:

Accepted Answer

A)  frictional unemployment. 
B)  structural unemployment. 
C)  cyclical unemployment. 
D)  a higher labor force participation rate. 
A)  frictional unemployment. 
B)  structural unemployment. 
C)  cyclical unemployment. 
D)  a higher labor force participation rate.

Question 9

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 10

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 11

A person who voluntarily quits his/her job in New York and expects to get a similar job in Los Angeles is an example of:

Accepted Answer

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

Question 12

Which one of the following people would not be considered a part of the civilian 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.

Question 13

A person who has given up searching for work is called:

Accepted Answer

A)  frictionally unemployed. 
B)  structurally unemployed. 
C)  a discouraged worker. 
D)  unemployed. 
A)  frictionally unemployed. 
B)  structurally unemployed. 
C)  a discouraged worker. 
D)  unemployed.

Question 14

Workers who may be between jobs are considered:

Accepted Answer

A)  frictionally unemployed. 
B)  structurally unemployed. 
C)  cyclically unemployed. 
D)  unemployable. 
E)  discouraged workers. 
A)  frictionally unemployed. 
B)  structurally unemployed. 
C)  cyclically unemployed. 
D)  unemployable. 
E)  discouraged workers.

Question 15

Brian Vargo, an auto repair mechanic who remains unemployed because he refuses to work for less than $1,000 an hour, is:

Accepted Answer

A)  counted as part of the labor force. 
B)  considered frictionally unemployed. 
C)  an underemployed worker. 
D)  not counted as part of the labor force. 
E)  considered as productively active. 
A)  counted as part of the labor force. 
B)  considered frictionally unemployed. 
C)  an underemployed worker. 
D)  not counted as part of the labor force. 
E)  considered as productively active.

Question 16

When actual real GDP output is below full-employment real GDP, the GDP measures the cost of cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 17

Consider an economy made up of 100 people, 60 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The number of people in the civilian labor force is:

Accepted Answer

A)  30. 
B)  60. 
C)  85. 
D)  90. 
E)  70. 
A)  30. 
B)  60. 
C)  85. 
D)  90. 
E)  70.

Question 18

The government's chief forecasting gauge for business cycles is the chained real GDP indicators.

Accepted Answer

A) True 
 B)False

Question 19

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 20

Stephen Moreno reported to the government interviewer that he worked 40 hours last week as a stocker at a Target department store. 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.

Exam 12: Business Cycles and Unemployment

Which of the following is true ?

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

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.

Actual GDP will be below potential GDP:

When the rate of cyclical unemployment is zero, the:

The business cycle consists of four phases. At the top we have:

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

A general mismatch between the skills of unemployed workers and the skills needed by employers with job openings results in:

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

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

A person who voluntarily quits his/her job in New York and expects to get a similar job in Los Angeles is an example of:

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

A person who has given up searching for work is called:

Workers who may be between jobs are considered:

Brian Vargo, an auto repair mechanic who remains unemployed because he refuses to work for less than $1,000 an hour, is:

When actual real GDP output is below full-employment real GDP, the GDP measures the cost of cyclical unemployment.

Consider an economy made up of 100 people, 60 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The number of people in the civilian labor force is:

The government's chief forecasting gauge for business cycles is the chained real GDP indicators.

Which of the following offers an example of frictional unemployment?

Stephen Moreno reported to the government interviewer that he worked 40 hours last week as a stocker at a Target department store. He is:

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

Filters