Question 1

The period of growth in real GDP between the trough of the business cycle and the next peak is called the

Accepted Answer

A) recessionary phase. 
B) expansionary phase. 
C) contractionary phase. 
D) cyclical phase. 
A) recessionary phase. 
B) expansionary phase. 
C) contractionary phase. 
D) cyclical phase.

Question 2

Louise is unemployed due to a decrease in the demand for workers with a knowledge of a certain word processing language.This is an example of

Accepted Answer

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

Question 3

The population (age 16 and over)of Econoland is 100 million;5 million are unemployed,and 70 million hold jobs.The labor force participation rate in Econoland is

Accepted Answer

A) 5 percent. 
B) 65 percent. 
C) 70 percent. 
D) 75 percent. 
A) 5 percent. 
B) 65 percent. 
C) 70 percent. 
D) 75 percent.

Question 4

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 5

When workers are unemployed due to a mismatch between their skills and the jobs available,economists call this

Accepted Answer

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

Question 6

Which of the following is a danger of high rates of inflation?

Accepted Answer

A) Price changes encourage long-term contracts at the expense of short-term contracts. 
B) Rapid price changes reduce uncertainty. 
C) Inflation increases the real value of assets,such as stocks and bonds. 
D) Inflation will encourage people to spend less time producing and more time trying to protect the value of their assets. 
A) Price changes encourage long-term contracts at the expense of short-term contracts. 
B) Rapid price changes reduce uncertainty. 
C) Inflation increases the real value of assets,such as stocks and bonds. 
D) Inflation will encourage people to spend less time producing and more time trying to protect the value of their assets.

Question 7

In a modern dynamic economy such as the United States,full employment generally means

Accepted Answer

A) cyclical unemployment is present. 
B) everyone (excluding teenagers)that would like to work is employed. 
C) approximately 95 percent of the labor force is employed. 
D) 100 percent of the labor force is either working or seeking work. 
A) cyclical unemployment is present. 
B) everyone (excluding teenagers)that would like to work is employed. 
C) approximately 95 percent of the labor force is employed. 
D) 100 percent of the labor force is either working or seeking work.

Question 8

If the official unemployment rate increases in March from its February level because of sluggish sales in the auto industry,we can conclude that ____ unemployment is responsible for the increase.

Accepted Answer

A) seasonal 
B) cyclical 
C) structural 
D) frictional 
E) any one of the causes of 
A) seasonal 
B) cyclical 
C) structural 
D) frictional 
E) any one of the causes of

Question 9

Which of the following would be classified as employed?

Accepted Answer

A) a full-time college student 
B) a construction worker on layoff due to cold weather 
C) a parent who works 50 to 60 hours per week caring for family members 
D) a worker who is in the midst of a two-week vacation from his regular job 
A) a full-time college student 
B) a construction worker on layoff due to cold weather 
C) a parent who works 50 to 60 hours per week caring for family members 
D) a worker who is in the midst of a two-week vacation from his regular job

Question 10

When real GDP grows more slowly than potential GDP,

Accepted Answer

A) nominal GDP rises. 
B) the unemployment rate falls. 
C) labor productivity falls. 
D) the unemployment rate rises. 
A) nominal GDP rises. 
B) the unemployment rate falls. 
C) labor productivity falls. 
D) the unemployment rate rises.

Question 11

Which one of the following persons would be considered unemployed?

Accepted Answer

A) a person not working who has given up searching for a job 
B) a part-time worker looking for a full-time job 
C) a construction worker who was laid off due to cold weather 
D) a full-time college student who is not a member of the labor force 
A) a person not working who has given up searching for a job 
B) a part-time worker looking for a full-time job 
C) a construction worker who was laid off due to cold weather 
D) a full-time college student who is not a member of the labor force

Question 12

The figures below (in millions)are for the United States during the year 2003.
 
The rate of labor force participation of the U.S.in 2003 was

Accepted Answer

A) 6 percent. 
B) 62.3 percent. 
C) 66.2 percent. 
D) 137.7 percent. 
A) 6 percent. 
B) 62.3 percent. 
C) 66.2 percent. 
D) 137.7 percent.

Question 13

When an economy is operating at its full employment rate of output,

Accepted Answer

A) the rate of unemployment will be zero. 
B) output will exceed the economy's maximum sustainable rate. 
C) the actual rate of unemployment will equal the natural rate. 
D) the economy's potential rate of output will exceed actual GDP. 
A) the rate of unemployment will be zero. 
B) output will exceed the economy's maximum sustainable rate. 
C) the actual rate of unemployment will equal the natural rate. 
D) the economy's potential rate of output will exceed actual GDP.

Question 14

The period of declining growth in real GDP between the peak of the business cycle and the trough is called the

Accepted Answer

A) contractionary phase. 
B) boom. 
C) expansionary phase. 
D) stationary phase. 
A) contractionary phase. 
B) boom. 
C) expansionary phase. 
D) stationary phase.

Question 15

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 16

During a boom,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 expansion. 
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 expansion.

Question 17

In a properly operating,dynamic economy,

Accepted Answer

A) the unemployment rate should remain near zero. 
B) we would expect to have some unemployment due to normal structural and frictional factors. 
C) the rate of unemployment will be very high during economic booms. 
D) the employment/population ratio should average 100 percent. 
A) the unemployment rate should remain near zero. 
B) we would expect to have some unemployment due to normal structural and frictional factors. 
C) the rate of unemployment will be very high during economic booms. 
D) the employment/population ratio should average 100 percent.

Question 18

Sharon was being treated unfairly by her boss,so she stormed off the job and two days later found another position.For two days,Sharon experienced

Accepted Answer

A) cyclical unemployment. 
B) structural unemployment. 
C) seasonal unemployment. 
D) frictional unemployment. 
E) being out of the labor force. 
A) cyclical unemployment. 
B) structural unemployment. 
C) seasonal unemployment. 
D) frictional unemployment. 
E) being out of the labor force.

Question 19

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 20

When the "baby boom" generation began entering the labor market during the 1960s and 1970s,youthful workers as a share of the labor force increased causing a(n)

Accepted Answer

A) reduction in frictional unemployment. 
B) reduction in cyclical unemployment. 
C) reduction in actual unemployment. 
D) increase in the natural rate of unemployment. 
A) reduction in frictional unemployment. 
B) reduction in cyclical unemployment. 
C) reduction in actual unemployment. 
D) increase in the natural rate of unemployment.

Exam 8: Economic Fluctuations, unemployment, and Inflation

The period of growth in real GDP between the trough of the business cycle and the next peak is called the

Louise is unemployed due to a decrease in the demand for workers with a knowledge of a certain word processing language.This is an example of

The population (age 16 and over)of Econoland is 100 million;5 million are unemployed,and 70 million hold jobs.The labor force participation rate in Econoland is

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

When workers are unemployed due to a mismatch between their skills and the jobs available,economists call this

Which of the following is a danger of high rates of inflation?

In a modern dynamic economy such as the United States,full employment generally means

If the official unemployment rate increases in March from its February level because of sluggish sales in the auto industry,we can conclude that ____ unemployment is responsible for the increase.

Which of the following would be classified as employed?

When real GDP grows more slowly than potential GDP,

Which one of the following persons would be considered unemployed?

The figures below (in millions)are for the United States during the year 2003. The rate of labor force participation of the U.S.in 2003 was

When an economy is operating at its full employment rate of output,

The period of declining growth in real GDP between the peak of the business cycle and the trough is called the

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

During a boom,the actual rate of unemployment will be

In a properly operating,dynamic economy,

Sharon was being treated unfairly by her boss,so she stormed off the job and two days later found another position.For two days,Sharon experienced

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

When the "baby boom" generation began entering the labor market during the 1960s and 1970s,youthful workers as a share of the labor force increased causing a(n)

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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

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

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Lessons From the Great Depression

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The Federal Budget and the National Debt

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Earnings Differences Between Men and Women

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