The unemployment rate may underestimate the true extent of unemployment if:
answer
many part-time employees would like to work full-time, but are unable to get the additional work.
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Which of the following is false?
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NONE:
People looking for full-time work who grudgingly settle for a part-time job are counted as employed, even though they are only "partly" employed.
Some people working in the underground economy could be counted in labor statistics as unemployed, while others may be counted as not in the labor force.
Unemployment rates can be quite different across different segments of the population, as well as varying substantially over time.
The duration of unemployment tends to be greater when the amount of unemployment is high, and smaller when the amount of unemployment is low.
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A major macroeconomic goal of nearly every society is:
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ALL OF THE ABOVE
- maintaining stability of prices.
- maintaining high levels of employment.
- achieving high rates of economic growth.
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Which of the following individuals are considered officially unemployed?
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NONE OF THE ABOVE
- a discouraged worker
- an individual who quits his job to raise a child
- an individual who is not looking for a job because he works in the underground economy
- an inmate in a prison who is making license plates for the stat
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Discouraged workers are defined as those:
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who have given up looking for a job and are not counted as unemployed.
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Kathryn chooses to go to college full-time rather than to work. Kathryn:
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is not part of the labor force.
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The total labor force equals:
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the number of employed plus the number of unemployed persons.
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The unemployment rate is the number of people classified as unemployed as a percentage of:
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the labor force.
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Underemployment occurs when:
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a worker is over-qualified and possesses more skills than his job demands.
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The first formal acknowledgement of the primary macroeconomic goals of price stability, high employment, and promoting economic growth in the United States came with passage of the:
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the Employment Act of 1946.
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Which of the following is true?
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ALL OF THE ABOVE
- At the natural rate of unemployment, the economy is considered to be at full employment.
- At full employment, the economy is producing at its potential output.
- If unemployment is greater than its natural rate, the economy is producing at less than its potential output.
- If we are at less than full employment, some cyclical unemployment exists.
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The natural rate of unemployment:
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is the sum of both frictional and structural unemployment when they are at a maximum.
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In recent years, economists have come to believe that full employment in the U.S. economy occurs at an unemployment rate between:
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4.5 and 5.5 percent.
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According to Okun's law, a 2 percent increase in cyclical unemployment reduces output by almost:
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4 percent.
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A federal program aimed at retraining the unemployed workers of the declining coal and steel industries is designed to reduce which type of unemployment?
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structural
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Frictional unemployment occurs when:
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a worker decides to quit to seek a different job.
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Which of the following people is structurally unemployed?
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Clem, a skilled corset maker, lost his job when his factory shut down due to a permanent reduction in the demand for corsets.
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Cyclical unemployment arises when:
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business activity in the macroeconomy declines.
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When unemployment rises above the natural rate it reflects the existence of ____ unemployment.
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cyclical
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If the economy is operating with full employment, which of the following is essentially eliminated?
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cyclical unemployment
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Economists use the term "business cycle" to refer to:
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fluctuations in economic activity, measured by GDP or unemployment.
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An unanticipated period of deflation will:
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redistribute income from borrowers to lenders.
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In the typical CPI shopping basket, which of the categories below represents the largest percentage of consumer spending?
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housing
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Given a fixed nominal interest rate on a loan, unanticipated deflation:
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increases the burden of paying off the loan.
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The GDP deflator represents a somewhat ____ measure of prices that the CPI and the GDP deflator tends to be ____ volatile than the CPI.
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broader; less
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Why are creditors harmed by unexpected inflation?
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Creditors are paid back money with less spending power than when it was originally loaned out.
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During an inflationary period, those most likely to suffer reduced wealth are those who are holding their wealth in:
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currency.
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The costs imposed on a firm from changing listed prices are called:
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the menu costs of inflation.
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Which of the following groups would not tend to lose from unexpected inflation?
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Those whose wages have cost of living adjustment clauses in their contracts.
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Inflation exists whenever:
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the overall price level is rising.
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The type of unemployment that occurs because of a recession is called:
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cyclical unemployment.
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Which of the following describes the historical record of the business cycles in the United States?
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Periods of contraction seem to have gotten shorter over time.
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The period of declining growth in real GDP, between the peak of the business cycle and the trough, is called the:
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contractionary phase.
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In the expansion phase of the business cycle
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- output is rising.
- unemployment is falling.
- consumer and business confidence is high.
- investment is rising.
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Which of the following observations concerning phases of a business cycle is NOT correct?
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Maximum amount of unemployment occurs exactly at the trough.
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Which of the following is true?
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The expansions and contractions of real world business cycles last varying lengths of time and often differ in magnitude.
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Economists usually use the term "recession" to refer to:
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a significant reduction in output and employment lasting more than a few months.
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leading economic indicators
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Average workweek (manufacturing)
Initial unemployment claims
New orders for consumer goods
Vendor performance
New orders for plants and equipment
Building permits
Change in unfilled durable orders
Sensitive material prices
Stock prices (S&P 500)
Real Money Supply M2
Index of consumer expectations
Interest rate spread
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Which of the following observations concerning leading economic indicators is true?
answer
They provide warnings of likely downturns.
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Unemployment rises in ____, and falls in ____.
answer
contractions; expansions
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