Question 1

One problem with the unemployment rate is that:

Accepted Answer

A)  discouraged workers are included in the calculation. 
B)  the data includes part-time workers as fully employed. 
C)  underemployment is measured in the calculation. 
D)  all of the above are problems. 
A)  discouraged workers are included in the calculation. 
B)  the data includes part-time workers as fully employed. 
C)  underemployment is measured in the calculation. 
D)  all of the above are problems.

Question 2

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

Accepted Answer

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

Question 3

A major goal of federal government policy is to eliminate frictional unemployment.

Accepted Answer

A) True 
 B)False

Question 4

Full employment is the rate of employment that results when:

Accepted Answer

A)  all the labor resources of the economy are employed full time. 
B)  cyclical unemployment has reached its maximum. 
C)  everybody who wants a job can find one. 
D)  only frictional and structural unemployment are present. 
A)  all the labor resources of the economy are employed full time. 
B)  cyclical unemployment has reached its maximum. 
C)  everybody who wants a job can find one. 
D)  only frictional and structural unemployment are present.

Question 5

Which of the following is not a way to become officially unemployed?

Accepted Answer

A)  Quit your job to look for a better job in another part of the country. 
B)  Be fired from your job. 
C)  Look for a job after being out of the civilian labor force for five years. 
D)  Retire. 
E)  Look for a job only for the period in the summer that you are out of school. 
A)  Quit your job to look for a better job in another part of the country. 
B)  Be fired from your job. 
C)  Look for a job after being out of the civilian labor force for five years. 
D)  Retire. 
E)  Look for a job only for the period in the summer that you are out of school.

Question 6

Which of the following people would be officially counted as unemployed?

Accepted Answer

A)  A person who works only 5 hours per week for pay. 
B)  A full-time college student who chooses not to have a paying job. 
C)  A family member who works 20 hours per week without pay. 
D)  A jobless high-school graduate who is actively looking for work. 
A)  A person who works only 5 hours per week for pay. 
B)  A full-time college student who chooses not to have a paying job. 
C)  A family member who works 20 hours per week without pay. 
D)  A jobless high-school graduate who is actively looking for work.

Question 7

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 8

The economy is considered to be at full employment when:

Accepted Answer

A)  the actual rate of unemployment is less than the natural rate. 
B)  the leading economic indicators are unchanged for two consecutive quarters. 
C)  structural unemployment is zero. 
D)  frictional plus structural unemployment is less than the natural rate. 
E)  the rate of cyclical unemployment is zero. 
A)  the actual rate of unemployment is less than the natural rate. 
B)  the leading economic indicators are unchanged for two consecutive quarters. 
C)  structural unemployment is zero. 
D)  frictional plus structural unemployment is less than the natural rate. 
E)  the rate of cyclical unemployment is zero.

Question 9

A long and deep recession in the business cycle is:

Accepted Answer

A)  unemployment. 
B)  a trough. 
C)  a recession. 
D)  a depression 
E)  unavoidable. 
A)  unemployment. 
B)  a trough. 
C)  a recession. 
D)  a depression 
E)  unavoidable.

Question 10

To be counted as unemployed, a person must be looking for a job.

Accepted Answer

A) True 
 B)False

Question 11

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 12

The economy's natural rate of unemployment consists of:

Accepted Answer

A)  structural plus frictional unemployment. 
B)  cyclical plus frictional unemployment. 
C)  structural plus cyclical unemployment. 
D)  structural, frictional, and cyclical unemployment. 
A)  structural plus frictional unemployment. 
B)  cyclical plus frictional unemployment. 
C)  structural plus cyclical unemployment. 
D)  structural, frictional, and cyclical unemployment.

Question 13

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 14

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 15

The type of unemployment that occurs because of a recession is called:

Accepted Answer

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

Question 16

Juanita earned a B.S. in engineering and went to work for a large defense contractor in a small town in California. When the government cut spending, Juanita and 99 others were laid off. The only other business in the town is growing grapes to be made into raisins, but the growers refuse to hire laid-off engineers, knowing they will leave at the first opportunity. The unemployment Juanita is experiencing is:

Accepted Answer

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

Question 17

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 18

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 19

Exhibit 12-1  Business cycle   In Exhibit 12-1, point E represents:

Accepted Answer

A)  recession and a trough. 
B)  peak and a trough. 
C)  recession and a peak. 
D)  recovery and a peak. 
A)  recession and a trough. 
B)  peak and a trough. 
C)  recession and a peak. 
D)  recovery and a peak.

Question 20

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.

Exam 12: Business Cycles and Unemployment

One problem with the unemployment rate is that:

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

A major goal of federal government policy is to eliminate frictional unemployment.

Full employment is the rate of employment that results when:

Which of the following is not a way to become officially unemployed?

Which of the following people would be officially counted as unemployed?

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

The economy is considered to be at full employment when:

A long and deep recession in the business cycle is:

To be counted as unemployed, a person must be looking for a job.

Structural unemployment is unemployment caused by:

The economy's natural rate of unemployment consists of:

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

Which of the following statements is true ?

The type of unemployment that occurs because of a recession is called:

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

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

Exhibit 12-1 Business cycle In Exhibit 12-1, point E represents:

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:

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