Question 1

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.

Question 2

The unemployment rate equals the number of persons:

Accepted Answer

A)  unemployed divided by the number employed. 
B)  unemployed divided by the number in the civilian labor force. 
C)  unemployed divided by the population age 16 and over. 
D)  not working divided by the population age 16 and over.

Question 3

Structural unemployment is frequently caused by:

Accepted Answer

A)  technological changes that make certain job skills obsolete. 
B)  temporary layoffs in industries such as construction. 
C)  the impact of recessions on employment. 
D)  none of the above.

Question 4

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.

Question 5

Andrea Burris lost her job in a company layoff 5 months ago.She would take a job if one was offered,but she has given up looking for work until the economy improves.She 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)  now structurally unemployable.

Question 6

Suppose u = those adults who are unemployed and seeking work; e = those adults who are employed; and NLF = those adults not in the labor force.Which expression would equal the BLS definition of the unemployment rate?

Accepted Answer

A)  u / (e + NLF) 
B)  u / e 
C)  u / (u + e) 
D)  u / (e + NLF), 
E)  u / (u + e - NLF).

Question 7

Whom does the Bureau of Labor Statistics include in the discouraged workers group?

Accepted Answer

A)  All those between 16 and 65 who are neither disabled nor in an institution and are also neither employed nor seeking employment. 
B)  Civilian labor force members who have chosen early retirement because they dislike their work or think the pay is too low. 
C)  Members of the noninstitutional population who say they want to be employed but aren't searching for a job. 
D)  Members of the civilian labor force who are looking for a job but cannot find one. 
E)  Anyone in the population who is not working.

Question 8

What does the GDP gap measure?

Accepted Answer

The answer of What does the GDP gap measure?...

Question 9

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 10

Cyclical unemployment is caused by:

Accepted Answer

A)  shifts in the job skills required in the economy. 
B)  seasonal layoffs. 
C)  declines in real GDP. 
D)  cyclical changes in the job skills among workers.

Question 11

The ____ phase of the business cycle follows a recession.

Accepted Answer

A)  recovery 
B)  recession 
C)  peak 
D)  trough

Question 12

Which of the following is true?

Accepted Answer

A)  Frictional unemployment implies a lack of available jobs. 
B)  During a recession, cyclical unemployment will be low. 
C)  When an economy is at full employment, actual unemployment will be less than the natural rate of unemployment. 
D)  When actual GDP equals potential GDP, the actual unemployment rate will equal the economy's natural rate of unemployment.

Question 13

If a sizable number of workers were switched from full-time to half-time employment,then the official unemployment rate would:

Accepted Answer

A)  rise. 
B)  fall. 
C)  remain unchanged. 
D)  react unpredictably.

Question 14

Which of the following is not a lagging indicator?

Accepted Answer

A)  Duration of unemployment. 
B)  Stock prices. 
C)  Outstanding commercial and industrial loans. 
D)  Prime rate.

Question 15

Structural unemployment refers to short periods of unemployment needed to match jobs and job seekers.

Accepted Answer

A) True 
 B)False

Question 16

How do the Bureau of Labor Statistics and the Bureau of the Census estimate U.S.unemployment each month?

Accepted Answer

A)  They contact each state's unemployment office and gather data on new claims for unemployment. 
B)  They randomly survey about 60,000 U.S. households to determine how many people are in the labor force, and what proportion of them is unemployed. 
C)  They track released prisoners. These agencies adjust released prisoner employment unemployment rate proxy (PURP). 
D)  None of the above are correct.

Question 17

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 18

The civilian labor force consists of:

Accepted Answer

A)  all civilians over the age of 16. 
B)  the employed plus the unemployed who are not in the military. 
C)  only individuals who are actually at work during a given week. 
D)  civilians who are not in prisons or mental hospitals.

Question 19

Why might the official measure of civilian unemployment in the U.S.be an understatement of actual unemployment?

Accepted Answer

A) Because some workers become discouraged and no longer are actively seeking work.Thus they are not officially counted in the labor force,and consequently are not officially unemployed. 
B) Because the official measure of civilian unemployment fails to account for very high levels of unemployment among active-duty military personnel. 
C) Because the statistics count part-time employment as being no different from full-time employment,even though many part-time workers would prefer to be fully employed. 
D) Both a.and c.above are correct.

Question 20

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.

Exam 12: Business Cycles and Unemployment

The unemployment rate equals the number of persons:

Structural unemployment is frequently caused by:

In a dynamic economy under ideal conditions:

Andrea Burris lost her job in a company layoff 5 months ago.She would take a job if one was offered,but she has given up looking for work until the economy improves.She is:

Suppose u = those adults who are unemployed and seeking work; e = those adults who are employed; and NLF = those adults not in the labor force.Which expression would equal the BLS definition of the unemployment rate?

Whom does the Bureau of Labor Statistics include in the discouraged workers group?

What does the GDP gap measure?

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

Cyclical unemployment is caused by:

The ____ phase of the business cycle follows a recession.

Which of the following is true?

If a sizable number of workers were switched from full-time to half-time employment,then the official unemployment rate would:

Which of the following is not a lagging indicator?

Structural unemployment refers to short periods of unemployment needed to match jobs and job seekers.

How do the Bureau of Labor Statistics and the Bureau of the Census estimate U.S.unemployment each month?

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

The civilian labor force consists of:

Why might the official measure of civilian unemployment in the U.S.be an understatement of actual unemployment?

The economy's natural rate of unemployment consists of: