Question 1

The natural rate of unemployment

Accepted Answer

A)  is a temporary low rate that cannot be maintained. 
B)  is fixed; it cannot be altered by public policy. 
C)  is equal to the number of persons unemployed divided by the number in the labor force. 
D)  is the unemployment rate accompanying the economy's maximum sustainable rate of output. 
A)  is a temporary low rate that cannot be maintained. 
B)  is fixed; it cannot be altered by public policy. 
C)  is equal to the number of persons unemployed divided by the number in the labor force. 
D)  is the unemployment rate accompanying the economy's maximum sustainable rate of output.

Question 2

In a dynamic economy under ideal conditions,

Accepted Answer

A)  the unemployment rate should be near zero. 
B)  some unemployment would be present due to workers temporarily being out of work while changing jobs. 
C)  unemployment would tend to move upward slightly as prices increased. 
D)  unemployment would tend to move slightly downward as unemployment compensation benefits increased. 
A)  the unemployment rate should be near zero. 
B)  some unemployment would be present due to workers temporarily being out of work while changing jobs. 
C)  unemployment would tend to move upward slightly as prices increased. 
D)  unemployment would tend to move slightly downward as unemployment compensation benefits increased.

Question 3

Frictional unemployment is the result of

Accepted Answer

A)  not enough jobs for everyone to be employed. 
B)  unemployed workers' skills not matching those needed for the available jobs. 
C)  a decline in the demand for labor, such as during a recession. 
D)  imperfect information and temporary periods of unemployment while workers are changing jobs. 
A)  not enough jobs for everyone to be employed. 
B)  unemployed workers' skills not matching those needed for the available jobs. 
C)  a decline in the demand for labor, such as during a recession. 
D)  imperfect information and temporary periods of unemployment while workers are changing jobs.

Question 4

Teenage unemployment is substantially higher than unemployment among prime-age workers because teenagers

Accepted Answer

A)  are more likely to switch jobs and move into and out of the labor force. 
B)  are less likely to be in the labor force than are older workers since many teenagers are still in school. 
C)  are more likely to be in the armed forces, therefore, they're counted as unemployed. 
D)  generally think they can find jobs that are available only to experienced, highly skilled workers if they just search diligently enough. 
A)  are more likely to switch jobs and move into and out of the labor force. 
B)  are less likely to be in the labor force than are older workers since many teenagers are still in school. 
C)  are more likely to be in the armed forces, therefore, they're counted as unemployed. 
D)  generally think they can find jobs that are available only to experienced, highly skilled workers if they just search diligently enough.

Question 5

Which of the following is true of the business cycle record of the United States?

Accepted Answer

A)  Recessions have been lengthier during the last two decades than was true prior to 1980. 
B)  Real GDP contracted throughout most of the 1950s. 
C)  Real GDP in 2000 was approximately the same as 1950. 
D)  Since 1950, the fluctuations in GDP have been less severe than before 1950. 
A)  Recessions have been lengthier during the last two decades than was true prior to 1980. 
B)  Real GDP contracted throughout most of the 1950s. 
C)  Real GDP in 2000 was approximately the same as 1950. 
D)  Since 1950, the fluctuations in GDP have been less severe than before 1950.

Question 6

Which one of the following would be classified as employed?

Accepted Answer

A)  a parent who works 50 to 60 hours per week caring for family members 
B)  an construction worker vacationing in Florida who is on layoff due to bad weather conditions in his home state 
C)  a 21-year-old full-time college student 
D)  a 17-year-old high school student who works a newspaper route six hours per week 
A)  a parent who works 50 to 60 hours per week caring for family members 
B)  an construction worker vacationing in Florida who is on layoff due to bad weather conditions in his home state 
C)  a 21-year-old full-time college student 
D)  a 17-year-old high school student who works a newspaper route six hours per week

Question 7

Structural unemployment is a result of

Accepted Answer

A)  difficulties in matching qualified workers with available jobs. 
B)  inaccurate or costly information about job opportunities. 
C)  slow or negative economic growth, as during a recession. 
D)  not enough workers to fill available jobs. 
A)  difficulties in matching qualified workers with available jobs. 
B)  inaccurate or costly information about job opportunities. 
C)  slow or negative economic growth, as during a recession. 
D)  not enough workers to fill available jobs.

Question 8

During periods when the inflation rate fluctuates widely,

Accepted Answer

A)  all relative prices increase at the same rate, leaving money prices constant 
B)  economic efficiency increases because decision makers pay closer attention to changes in money prices 
C)  uncertainty about changes in relative prices causes a decrease in economic efficiency 
D)  all money prices increase at the same rate, leaving relative prices constant 
A)  all relative prices increase at the same rate, leaving money prices constant 
B)  economic efficiency increases because decision makers pay closer attention to changes in money prices 
C)  uncertainty about changes in relative prices causes a decrease in economic efficiency 
D)  all money prices increase at the same rate, leaving relative prices constant

Question 9

How will increased usage of the Internet by employers and employees influence the job search process?

Accepted Answer

A)  It will make job-related information more costly and, therefore, tend to increase the rate of unemployment. 
B)  It will make job-related information less costly and, therefore, tend to increase the rate of unemployment. 
C)  It will make job-related information more costly and, therefore, tend to reduce the rate of unemployment. 
D)  It will make job-related information less costly and, therefore, tend to reduce the rate of unemployment. 
A)  It will make job-related information more costly and, therefore, tend to increase the rate of unemployment. 
B)  It will make job-related information less costly and, therefore, tend to increase the rate of unemployment. 
C)  It will make job-related information more costly and, therefore, tend to reduce the rate of unemployment. 
D)  It will make job-related information less costly and, therefore, tend to reduce the rate of unemployment.

Question 10

The actual rate of unemployment will generally

Accepted Answer

A)  increase as an economy enters an economic boom period. 
B)  decrease as an economy enters an economic boom period. 
C)  exceed the natural rate of unemployment during an economic boom period. 
D)  do both a and c. 
A)  increase as an economy enters an economic boom period. 
B)  decrease as an economy enters an economic boom period. 
C)  exceed the natural rate of unemployment during an economic boom period. 
D)  do both a and c.

Question 11

Describe two ways that public policy could reduce the natural rate of unemployment.

Accepted Answer

Since one source of unemployment is the

Question 12

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 13

The employment/population ratio _____ between 1980 and 2000, but this ratio has _______ since 2000. (Fill in the blanks)

Accepted Answer

A)  fell; risen 
B)  was virtually constant; risen 
C)  rose; been virtually constant 
D)  rose; fallen 
A)  fell; risen 
B)  was virtually constant; risen 
C)  rose; been virtually constant 
D)  rose; fallen

Question 14

An individual should continue to spend time searching for a job as long as

Accepted Answer

A)  all salary offers are below what the person expected. 
B)  the marginal benefit expected from additional search exceeds the marginal cost. 
C)  job openings are available in the individual's field. 
D)  information is available that the individual has not yet collected. 
A)  all salary offers are below what the person expected. 
B)  the marginal benefit expected from additional search exceeds the marginal cost. 
C)  job openings are available in the individual's field. 
D)  information is available that the individual has not yet collected.

Question 15

If an economy is at its potential output level, which of the following is not true?

Accepted Answer

A)  The economy is at its full-employment output level. 
B)  Unemployment is at the natural level. 
C)  The price level is zero. 
D)  The output level being produced can be sustained indefinitely given the economy's resources and technology. 
E)  The only unemployment is frictional or structural. 
A)  The economy is at its full-employment output level. 
B)  Unemployment is at the natural level. 
C)  The price level is zero. 
D)  The output level being produced can be sustained indefinitely given the economy's resources and technology. 
E)  The only unemployment is frictional or structural.

Question 16

Which of the following about unemployment is true?

Accepted Answer

A)  The unemployment rates of the major European economies were substantially lower than in the United States during the last decade. 
B)  High unemployment rates over lengthy time periods are indicative of structural and regulatory factors that are exerting an adverse impact on the natural rate of unemployment. 
C)  The natural rate of unemployment is unaffected by changes in the age composition of the labor force (for example, an increase in the relative number of youthful workers). 
D)  Institutional changes such as an increase in the minimum wage may increase cyclical unemployment but will not affect the natural rate of unemployment. 
A)  The unemployment rates of the major European economies were substantially lower than in the United States during the last decade. 
B)  High unemployment rates over lengthy time periods are indicative of structural and regulatory factors that are exerting an adverse impact on the natural rate of unemployment. 
C)  The natural rate of unemployment is unaffected by changes in the age composition of the labor force (for example, an increase in the relative number of youthful workers). 
D)  Institutional changes such as an increase in the minimum wage may increase cyclical unemployment but will not affect the natural rate of unemployment.

Question 17

Dr. Smith on the Channel 6 news says, "The recent figures showing that the unemployment rate is lower this quarter than last quarter are a definite sign that our economy is coming out of the recession." Dr. Jones on the Channel 8 news says, "Recent figures showing that employment is lower this quarter than it was last quarter are a definite sign that our economy is still plunging deeper into the recession."
a.Is it possible for both unemployment and employment to fall at the same time? What factor could account for the observed phenomenon?
b.In light of your answer, what do you think about the health of the economy relative to last quarter?

Accepted Answer

a.Yes, if some of last period's unemploy

Question 18

During a recession, which of the following will be true?

Accepted Answer

A)  The actual rate of unemployment will be lower than the natural rate. 
B)  Actual GDP will be lower than potential GDP. 
C)  The employment/population ratio will increase substantially. 
D)  Actual inflation will be higher than was anticipated. 
A)  The actual rate of unemployment will be lower than the natural rate. 
B)  Actual GDP will be lower than potential GDP. 
C)  The employment/population ratio will increase substantially. 
D)  Actual inflation will be higher than was anticipated.

Question 19

Full employment is the situation in which the economy operates at an unemployment rate equal to the sum of

Accepted Answer

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

Question 20

During the last several decades the labor force participation rate

Accepted Answer

A)  of women has increased substantially. 
B)  of men has increased substantially. 
C)  of women has steadily declined. 
D)  of both men and women has steadily declined. 
A)  of women has increased substantially. 
B)  of men has increased substantially. 
C)  of women has steadily declined. 
D)  of both men and women has steadily declined.

The natural rate of unemployment

In a dynamic economy under ideal conditions,

Frictional unemployment is the result of

Teenage unemployment is substantially higher than unemployment among prime-age workers because teenagers

Which of the following is true of the business cycle record of the United States?

Which one of the following would be classified as employed?

Structural unemployment is a result of

During periods when the inflation rate fluctuates widely,

How will increased usage of the Internet by employers and employees influence the job search process?

The actual rate of unemployment will generally

Describe two ways that public policy could reduce the natural rate of unemployment.

The economy is considered to be at full employment when

The employment/population ratio _ between 1980 and 2000, but this ratio has ___ since 2000. (Fill in the blanks)

An individual should continue to spend time searching for a job as long as

If an economy is at its potential output level, which of the following is not true?

Which of the following about unemployment is true?

During a recession, which of the following will be true?

Full employment is the situation in which the economy operates at an unemployment rate equal to the sum of

During the last several decades the labor force participation rate

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Taking the Nations Economic Pulse

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad--As Model

Fiscal Policy: The Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy: Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Special Topics

Filters

Exam 8: Economic Fluctuations, Unemployment, and Inflation

The natural rate of unemployment

In a dynamic economy under ideal conditions,

Frictional unemployment is the result of

Teenage unemployment is substantially higher than unemployment among prime-age workers because teenagers

Which of the following is true of the business cycle record of the United States?

Which one of the following would be classified as employed?

Structural unemployment is a result of

During periods when the inflation rate fluctuates widely,

How will increased usage of the Internet by employers and employees influence the job search process?

The actual rate of unemployment will generally

Describe two ways that public policy could reduce the natural rate of unemployment.

The economy is considered to be at full employment when

The employment/population ratio _____ between 1980 and 2000, but this ratio has _______ since 2000. (Fill in the blanks)

An individual should continue to spend time searching for a job as long as

If an economy is at its potential output level, which of the following is not true?

Which of the following about unemployment is true?

During a recession, which of the following will be true?

Full employment is the situation in which the economy operates at an unemployment rate equal to the sum of

During the last several decades the labor force participation rate

The Economic Approach

Some Tools of the Economist

Demand, Supply, and the Market Process

Supply and Demand: Applications and Extensions

Difficult Cases for the Market, and the Role of Government

The Economics of Political Action

Taking the Nations Economic Pulse

An Introduction to Basic Macroeconomic Markets

Dynamic Change, Economic Fluctuations, and the Ad--As Model

Fiscal Policy: The Keynesian View and the Historical Development of Macroeconomics

Fiscal Policy: Incentives, and Secondary Effects

Money and the Banking System

Modern Macroeconomics and Monetary Policy

Stabilization Policy, Output, and Employment

Creating an Environment for Growth and Prosperity

Institutions, Policies, and Cross-Country Differences in Income and Growth

Gaining From International Trade

International Finance and the Foreign Exchange Market

Special Topics

Filters

The employment/population ratio _ between 1980 and 2000, but this ratio has ___ since 2000. (Fill in the blanks)