Question 1

Use the data below to answer the following question.
 
What is the unemployment rate of the economy?

Accepted Answer

A) 3.3 percent 
B) 4 percent 
C) 5 percent 
D) 5.3 percent 
A) 3.3 percent 
B) 4 percent 
C) 5 percent 
D) 5.3 percent

Question 2

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 3

John is on layoff from his assembly-line job in Detroit,and he expects to return in about four weeks.During this time,he is vacationing in Florida.The Bureau of Labor Statistics would classify John as

Accepted Answer

A) employed. 
B) unemployed. 
C) not part of the labor force. 
D) a temporary retiree. 
A) employed. 
B) unemployed. 
C) not part of the labor force. 
D) a temporary retiree.

Question 4

During a period of rapid growth in output,

Accepted Answer

A) employment generally increases and unemployment decreases. 
B) employment generally decreases and unemployment increases. 
C) both employment and unemployment generally increase. 
D) both employment and unemployment generally decrease. 
A) employment generally increases and unemployment decreases. 
B) employment generally decreases and unemployment increases. 
C) both employment and unemployment generally increase. 
D) both employment and unemployment generally decrease.

Question 5

Inflation isn't costly just because prices are going up.After all,inflation means salaries and wages are going up as well.If higher prices are not the problem,discuss two important aspects of inflation that are costly.

Accepted Answer

One important cost of inflation is that

Question 6

If the labor force grows at a faster rate than the number employed,the

Accepted Answer

A) unemployment rate will fall. 
B) unemployment rate will rise. 
C) labor force participation rate will fall. 
D) employment rate will rise. 
A) unemployment rate will fall. 
B) unemployment rate will rise. 
C) labor force participation rate will fall. 
D) employment rate will rise.

Question 7

When people become unemployed because of a higher minimum wage,this type of unemployment is called

Accepted Answer

A) frictional. 
B) structural. 
C) cyclical. 
D) abnormal. 
A) frictional. 
B) structural. 
C) cyclical. 
D) abnormal.

Question 8

Which of the following 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 9

Inflation is best described as

Accepted Answer

A) high prices. 
B) a sustained increase in the general level of prices as indicated by a price index. 
C) an increase in the purchasing power of money. 
D) an increase in the price of a particular good or service that is necessary for all consumers. 
A) high prices. 
B) a sustained increase in the general level of prices as indicated by a price index. 
C) an increase in the purchasing power of money. 
D) an increase in the price of a particular good or service that is necessary for all consumers.

Question 10

The recessionary phase of the business cycle is characterized by

Accepted Answer

A) decreasing real output and increasing unemployment. 
B) decreasing real output and declining unemployment. 
C) increasing real output and increasing unemployment. 
D) increasing real output and declining unemployment. 
A) decreasing real output and increasing unemployment. 
B) decreasing real output and declining unemployment. 
C) increasing real output and increasing unemployment. 
D) increasing real output and declining unemployment.

Question 11

Which of the following is true?

Accepted Answer

A) A "depression" is a recession that is mild and relatively brief. 
B) The expansions and contractions of real world business cycles last varying lengths of time. 
C) The timing of business fluctuations is regular and,therefore,easily predictable. 
D) During the recessionary phase of the business cycle,the rate of unemployment is generally quite low. 
A) A "depression" is a recession that is mild and relatively brief. 
B) The expansions and contractions of real world business cycles last varying lengths of time. 
C) The timing of business fluctuations is regular and,therefore,easily predictable. 
D) During the recessionary phase of the business cycle,the rate of unemployment is generally quite low.

Question 12

If borrowers and lenders expect a higher rate of inflation,

Accepted Answer

A) nominal interest rates will tend to fall. 
B) real interest rates will tend to fall. 
C) nominal interest rates will tend to rise. 
D) real interest rates will tend to rise. 
A) nominal interest rates will tend to fall. 
B) real interest rates will tend to fall. 
C) nominal interest rates will tend to rise. 
D) real interest rates will tend to rise.

Question 13

Full employment is the rate of employment that results when

Accepted Answer

A) all labor resources of an economy are employed. 
B) there is efficient use of the labor force,with allowance made for normal unemployment due to dynamic changes and the structural conditions of the economy. 
C) cyclical unemployment is between 4 and 5 percent of the labor force. 
D) everybody who wants a job can find one. 
A) all labor resources of an economy are employed. 
B) there is efficient use of the labor force,with allowance made for normal unemployment due to dynamic changes and the structural conditions of the economy. 
C) cyclical unemployment is between 4 and 5 percent of the labor force. 
D) everybody who wants a job can find one.

Question 14

During a recession,the actual rate of unemployment will be

Accepted Answer

A) less than the natural rate of unemployment. 
B) greater than the natural rate of unemployment. 
C) equal to the natural rate of unemployment. 
D) unaffected by the economic contraction. 
A) less than the natural rate of unemployment. 
B) greater than the natural rate of unemployment. 
C) equal to the natural rate of unemployment. 
D) unaffected by the economic contraction.

Question 15

Jennifer is tending to her home garden while awaiting recall from her seasonal part-time job.The Bureau of Labor Statistics would classify Jennifer as

Accepted Answer

A) not in the labor force. 
B) employed. 
C) unemployed. 
D) employed as a household worker. 
A) not in the labor force. 
B) employed. 
C) unemployed. 
D) employed as a household worker.

Question 16

Bob is unemployed because his skills have become obsolete due to technological advances.This is ____ unemployment.

Accepted Answer

A) frictional 
B) structural 
C) cyclical 
D) abnormal 
A) frictional 
B) structural 
C) cyclical 
D) abnormal

Question 17

Figure 8-1
  
-In Figure 8-1,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

Question 18

Unemployment caused by people voluntarily quitting work in order to seek more attractive employment is called

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 19

The population (age 16 and over)of Econoland is 100 million;5 million are unemployed,and 70 million hold jobs.The employment/population ratio of Econoland is

Accepted Answer

A) 5 percent. 
B) 65 percent. 
C) 70 percent. 
D) 85 percent. 
A) 5 percent. 
B) 65 percent. 
C) 70 percent. 
D) 85 percent.

Question 20

Which of the following would be officially classified as unemployed?

Accepted Answer

A) a school administrator who has been working as a substitute teacher one day per week while looking for a full-time job in administration 
B) a mathematician who returned to graduate school after failing to find a job the last four months 
C) a 60-year-old former steel worker who would like to work but has given up actively seeking employment 
D) None of the above would be officially classified as unemployed. 
A) a school administrator who has been working as a substitute teacher one day per week while looking for a full-time job in administration 
B) a mathematician who returned to graduate school after failing to find a job the last four months 
C) a 60-year-old former steel worker who would like to work but has given up actively seeking employment 
D) None of the above would be officially classified as unemployed.

Exam 8: Economic Fluctuations, unemployment, and Inflation

Use the data below to answer the following question. What is the unemployment rate of the economy?

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

John is on layoff from his assembly-line job in Detroit,and he expects to return in about four weeks.During this time,he is vacationing in Florida.The Bureau of Labor Statistics would classify John as

During a period of rapid growth in output,

Inflation isn't costly just because prices are going up.After all,inflation means salaries and wages are going up as well.If higher prices are not the problem,discuss two important aspects of inflation that are costly.

If the labor force grows at a faster rate than the number employed,the

When people become unemployed because of a higher minimum wage,this type of unemployment is called

Which of the following is true?

Inflation is best described as

The recessionary phase of the business cycle is characterized by

Which of the following is true?

If borrowers and lenders expect a higher rate of inflation,

Full employment is the rate of employment that results when

During a recession,the actual rate of unemployment will be

Jennifer is tending to her home garden while awaiting recall from her seasonal part-time job.The Bureau of Labor Statistics would classify Jennifer as

Bob is unemployed because his skills have become obsolete due to technological advances.This is ____ unemployment.

Figure 8-1 -In Figure 8-1,the recovery phase of the business cycle can be represented by points:

Unemployment caused by people voluntarily quitting work in order to seek more attractive employment is called

The population (age 16 and over)of Econoland is 100 million;5 million are unemployed,and 70 million hold jobs.The employment/population ratio of Econoland is

Which of the following would be officially classified as unemployed?

The Economic Approach

Asome Tools of the Economist

Asupply,demand,and the Market Process

Asupply and Demand: Applications and Extensions

Difficult Cases for the Market and the Role of Government

The Economics of Collective Decision-Making

Ataking the Nations Economic Pulse

Aan Introduction to Basic Macroeconomic Markets

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

Fiscal Policy: the Keynesian View and Historical Perspective

Fiscal Policy, incentives, and Secondary Effects

Amoney 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

Consumer Choice and Elasticity

Acosts and the Supply of Goods

Aprice Takers and the Competitive Process

Price-Searcher Markets With Low Entry Barriers

Aprice-Searcher Markets With High Entry Barriers

The Supply of and Demand for Productive Resources

Earnings, productivity, and the Job Market

Investment, the Capital Market, and the Wealth of Nations

Income Inequality and Poverty

Government Spending and Taxation

The Economics of Social Security

The Stock Market: Its Function, Performance, and Potential As an Investment Opportunity

Great Debates in Economics: Keynes Versus Hayek

The Crisis of 2008: Causes and Lessons for the Future

Lessons From the Great Depression

Lessons From Japan and Canada

The Federal Budget and the National Debt

The Economics of Healthcare

Education: Problems and Performance

Earnings Differences Between Men and Women

Do Labor Unions Increase the Wages of Workers

The Question of Resource Exhaustion

Difficult Environmental Cases and the Role of Government

Filters