Deck 7: Unemployment and Inflation

Question 1

The view that union wage demands may be a source of inflation would be best associated with cost-push inflation.​

Answer 1

True

Question 2

The unemployment rate among African American workers in the United States is higher than that among white workers.​

Answer 2

True

Question 3

If the price level increases by 2 percent each year,the inflation rate is increasing.​

Answer 3

True

Question 4

Ginger quits her job as personal secretary to the Vice President of HR Technologies because she cannot handle the stress.It takes her three weeks to find a job as a receptionist at Mariam Hotels and Resorts.Over these three weeks,she would be considered frictionally unemployed.​

Question 5

Most of the unemployment during the Great Depression was cyclical unemployment.​

Question 6

Discouraged workers are included in labor force figures,but not in unemployment figures.​

Question 7

If someone with a Ph.D.in philosophy finds work as a taxi driver,but continues to look for a college teaching position,he is counted as being employed.​

Question 8

Inmates from the county prison who are on work release are counted as part of the labor force.​

Question 9

Demand-pull inflation is worse than cost-push inflation because,in addition to higher prices,demand-pull inflation also reduces employment.​

Question 10

Inflation can only be caused by an increase in aggregate demand.​

Question 11

Construction workers at times face high rates of unemployment because their work is both seasonal and subject to wide swings over the business cycle.​

Question 12

A sustained decrease in an economy's price level is known as deflation.​

Question 13

A major cost of unemployment is lost production.​

Question 14

The labor force consists of all adults who are currently employed.​

Question 15

A person whose skills do not match available job openings is considered frictionally unemployed.​

Question 16

During periods of high inflation,people want to hold as much money as possible.​

Question 17

The unemployment rate rises any time there is an increase in the number of unemployed persons.​

Question 18

Inflation is defined as a sustained increase in an economy's price level.​

Question 19

Hyperinflation refers to a period of extremely erratic inflation rates.​

Question 20

Government fiscal policies that attempt to stimulate aggregate demand are often aimed at reducing cyclical unemployment.​

Question 21

The unemployment rate will increase whenever there is a(n):​

A)increase in the number of unemployed persons.
B)increase in the number of unemployed persons relative to the size of the labor force.
C)increase in the size of the U.S.population but no change in the number of unemployed persons.
D)increase in the size of the labor force.
E)increase in the size of the U.S.population and a decrease in the number of unemployed persons.

Question 22

During periods of inflation,the real value of a given amount of nominal dollars decreases.​

Question 23

Consider an economy made up of 100 people sixteen years of age and older,60 of whom hold jobs,10 of whom are looking for work,and 15 of whom are retired.The number of people in the labor force is _____.​

A)30
B)60​
C)85​
D)90​
E)70

Question 24

Which of the following people would be counted in the labor force?​

A)Chou,who lost his job and last looked for work three months ago
B)Stephanie,who holds a Ph.D.in history but can only find part-time employment at a fast food restaurant​
C)Jordan,who would like to work as a stockbroker but is a stay-at-home father​
D)Steffan,who is a patient in a mental hospital​
E)Monique,age 90,who is enjoying her retirement in Montana​

Question 25

Which of the following is not a cost of unemployment?​

A)A loss of income
B)Emotional or psychological problems​
C)Loss of job skills​
D)A decrease in production​
E)Higher annual inflation rates​

Question 26

The real interest rate can be negative.​

Question 27

The nominal interest rate is determined in the market for loanable funds.​

Question 28

People who are not currently employed but say they want a job are counted as unemployed only if they:​

A)have previously held a job.
B)are actively seeking employment.
C)are discouraged workers.
D)are between 16 and 65 years of age.
E)are willing to accept any offer of employment.

Question 29

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 unemployed persons is _____.​

A)10
B)15​
C)40​
D)30​
E)90​

Question 30

The unemployment rate measures the:​

A)number of people in the labor force divided by the adult population.
B)percentage of people in the labor force who are unemployed.
C)percentage of people in an economy who have dropped out of the labor force.
D)number of people in the adult population who are looking for work.
E)number of people in the labor force who are not working.

Question 31

Anticipated inflation causes more problems in the economy than unanticipated inflation.​

Question 32

Unanticipated inflation generally hurts borrowers and benefits lenders.​

Question 33

Inflation is the hardest on those living on fixed incomes.​

Question 34

An increase in the demand for loanable funds,other things constant,will increase the interest rate.​

Question 35

An increase in the interest rate will increase the demand for loanable funds.​

Question 36

The labor force in an economy consists of all:​

A)the people in the economy who are not retired.
B)the people in the economy over 16 years of age.
C)the adults in the economy between 18 and 65 years old who are able to work.
D)the civilian noninstitutional adult population that is either working or looking for work.
E)the noninstitutional adult population who are graduates of high school.

Question 37

Relative prices describe the terms at which individual goods are exchanged for one another.

Question 38

During periods of inflation,all prices increase.​

Question 39

An increase in the supply of loanable funds,other things constant,will increase the interest rate.​

Question 40

The nominal interest rate is equal to the real interest rate minus the anticipated inflation rate.​

Question 41

"Discouraged workers" comprise the percentage of those in the:​

A)labor force who are employed and are seeking employment.
B)labor force who have chosen early retirement because they dislike their work.
C)adult population who want to be employed but have given up the search for a job.
D)labor force who are looking for a job but cannot find one.
E)adult population who are in the labor force.

Question 42

A discouraged worker is one who:​

A)is underqualified for his current job.
B)dislikes his current job but is afraid to quit.
C)drops out of the labor force because he cannot find a job.
D)quits his job because the possibility of advancement was very low.
E)is overqualified for his current job.

Question 43

In April 2010,the U.S.economy added 290,000 jobs but the unemployment rate still increased from 9.7 percent to 9.9 percent.Which of the following best explains this situation?​

A)The size of the labor force shrunk.
B)The number of unemployed workers also increased,but by a smaller percentage.
C)The number of illegal immigrants increased substantially.
D)The number of discouraged workers increased substantially.
E)The number of unemployed workers also increased,but by an even greater percentage.

Question 44

Which of the following people would be classified as unemployed?​

A)A person who wants a job as a fashion model but cannot find work in that field
B)Someone who quits a part-time job to attend school full time​
C)Someone who does not have a job and gives up looking for one​
D)A person who works at a job that underutilizes his or her skills​
E)A person who works part-time and would rather work full time​

Question 45

​If top government officials claim that more people are working now than ever before,then which of the following is true?

A)The unemployment rate is lower now than ever before.
B)The number of people unemployed is lower now than ever before.
C)The employment rate is higher now than ever before.
D)The number of people in the labor force is higher now than ever before.
E)The number of people employed is higher now than ever before.

Question 46

Suppose the total population of an economy is 150 million,the labor force is 100 million,and the unemployment is 94 million.The unemployment rate is _____.​

A)6 percent
B)80 percent​
C)94 percent​
D)10 percent​
E)15 percent​

Question 47

Which of the following people would be counted as employed?​

A)A retired naval officer
B)A high school student​
C)A stay-at-home father​
D)A teenager who has given up looking for work after a year of trying​
E)A ski instructor who is working during the summer​

Question 48

Which of the following groups tends to have the highest unemployment rate in the United States?​

A)African American teenagers
B)Workers,age 25 or older,who are college graduates​
C)White women​
D)Workers,25 years of age or older,who are high school dropouts​
E)White teenagers​

Question 49

Which of the following people would be counted among the unemployed?​

A)A new college graduate selling newspaper advertisements part time while looking for other work
B)A new college graduate selling newspaper advertisements full time while looking for other work​
C)A new college graduate selling newspaper advertisements part time and not looking for other work​
D)A new college graduate who gets tired of selling newspaper advertisements and takes off on a motorcycle trip to Alaska​
E)A new college graduate not qualified for any of the jobs available in his small town​

Question 50

In an economy,U = the number of adults who are unemployed,E = the number of adults who are employed,and NLF = the number of adults not in the labor force.The labor force participation rate in the economy is equal to:​

A)U/(U + E).
B)E/(U + E).
C)U/(U + E + NLF).
D)E/(U + E + NLF).
E)(U + E)/(U + E + NLF).

Question 51

Anne is an accountant who lost her job in the last recession and has given up looking for work after an unsuccessful job search.Which of the following is true in this case?​

A)She is a discouraged worker.
B)She is underemployed.
C)This is an example of cyclical unemployment.
D)This is an example of seasonal unemployment.
E)She is overemployed.

Question 52

​Who among the following would not be considered officially unemployed?

A)Jones,who quit his job to look for a better job in another part of the country
B)Jason,who got fired from his job when the government cut spending​
C)Bourne,who is looking for a job after being out of the labor force for five years​
D)Sophie,who retired early because she disliked her current job​
E)Annie,who dropped out of the labor force after a year of job search​

Question 53

Consider an economy with an adult population of 100,50 of whom hold jobs,10 of whom are looking for work,and 15 of whom are retired.The labor force participation rate is _____.​

A)100 percent
B)60 percent​
C)50 percent​
D)40 percent​
E)10 percent​

Question 54

​The unemployment rate will decrease whenever there is a(n)_____.

A)increase in the number of persons classified as unemployed
B)decrease in the number of unemployed persons relative to the size of the labor force​
C)decrease in the size of the population and no change in the number of persons classified as employed​
D)reduction in the size of the labor force​
E)decrease in the number of unemployed persons and no change the population​

Question 55

Which of the following groups experiences high unemployment rates?​

A)White-collar professionals
B)Attorneys​
C)Technical workers​
D)Blue-collar workers​
E)Web page designers​

Question 56

A recent college graduate who is looking for her first job would be considered _____.​

A)a discouraged worker
B)underemployed​
C)overemployed​
D)unemployed​
E)not in the labor force​

Question 57

Which of the following is true of labor force participation rates in the United States since the 1950s?​

A)The rates for both men and women have risen.
B)The rate for women has fallen; the rate for men has risen.
C)The rate for men has fallen; the rate for women has increased.
D)The rates for both men and women have fallen.
E)The rates for both men and women have remained fairly constant.

Question 58

In an economy,U = the number of adults who are unemployed,E = the number of adults who are employed,and NLF = the number of adults not in the labor force.The unemployment rate of the economy is equal to:​

A)U/(E + NLF).
B)U/E.
C)U/(U + E).
D)U/(E + NLF).
E)U/(U + E − NLF).

Question 59

Which of the following is true of the labor force participation rate?​

A)When workers become unemployed,the labor force participation rate declines.
B)When the unemployed become discouraged workers,the labor force participation rate declines.
C)When workers do not fully use their skills,the labor force participation rate decreases.
D)Since the 1950s,the labor force participation rate of women has decreased in the United States.
E)The trend toward earlier retirement has increased the labor force participation rate in the United States.

Question 60

The labor force participation rate for women in the United States has _____.​

A)stayed the same over the last 30 years
B)increased significantly since the 1950s​
C)decreased significantly since the 1950s​
D)fluctuated substantially both upward and downward since the 1950s​
E)increased only very slightly since the 1950s​

Question 61

The best example of a frictionally unemployed worker is one who:​

A)has been looking for work for 27 weeks or longer.
B)is laid off during a recessionary period in the economy.
C)is in the process of voluntarily switching jobs.
D)is discouraged and not actively seeking work.
E)cannot find a job that matches with his skills.

Question 62

Which of the following types of unemployment is the hardest to reduce?​

A)Cyclical unemployment
B)Structural unemployment​
C)Voluntary unemployment​
D)Frictional unemployment​
E)Seasonal unemployment​

Question 63

Which type of unemployment is likely to increase the most during an economy's recession?​

A)Frictional unemployment
B)Seasonal unemployment​
C)Structural unemployment​
D)Cyclical unemployment​
E)Underemployment​

Question 64

Which type of unemployment is likely to decrease the most during an economy's boom?​

A)Frictional unemployment
B)Seasonal unemployment​
C)Structural unemployment​
D)Cyclical unemployment​
E)Underemployment​

Question 65

Recently,banking has become easier with automated teller machines replacing bank tellers.The loss of tellers' jobs is an example of _____.​

A)cyclical unemployment
B)structural unemployment​
C)frictional unemployment​
D)underemployment​
E)voluntary unemployment​

Question 66

In recent times,there has been a decline in the sale of newspapers in the U.S.as people prefer to read the news on the internet.This has caused many newspaper journalists to lose their jobs.This is an example of:​

A)structural unemployment.
B)frictional unemployment.
C)cyclical unemployment.
D)seasonal unemployment.
E)underemployment.

Question 67

The impact of _____ unemployment is removed from official monthly unemployment figures.​

A)cyclical
B)structural​
C)seasonal​
D)frictional​
E)involuntary​

Question 68

_____ unemployment is experienced by a customer service representative who is laid off from a job because new technology reduces the need for people to handle customer service inquiries.​

A)Seasonal
B)Cyclical​
C)Voluntary​
D)Structural​
E)Frictional​

Question 69

Which type of unemployment is most likely to help an economy become more efficient?​

A)Cyclical unemployment
B)Voluntary unemployment​
C)Seasonal unemployment​
D)Frictional unemployment​
E)Underemployment​

Question 70

Structural unemployment refers to unemployment that results from:​

A)inefficiencies in the market for labor that prolong the job search.
B)being in the wrong geographical location.
C)the specialization and division of labor.
D)seasonal decreases in demand for labor.
E)a recession in the economy.

Question 71

Which of the following statements is true of unemployment?​

A)Cyclical unemployment decreases during recessions and increases during expansions.
B)Some unemployment exists even when the economy is healthy and growing.
C)Unemployment and inflation are not related.
D)People who are willing and able to work but have given up the search for a job are considered unemployed.
E)Voluntary unemployment refers to a situation in which people who really do not want to work only pretend to look for jobs.

Question 72

In 2004,Jamal lost his job as a shipbuilder.His shipyard never reopened,and his very specialized skills as a shipbuilder were no longer in demand.Jamal's unemployment is best classified as _____.​

A)cyclical
B)structural​
C)seasonal​
D)frictional
E)voluntary

Question 73

If the official unemployment rate increases from December to January because the Christmas season is over,we can conclude that _____ is responsible for the increase.​

A)seasonal unemployment​
B)cyclical unemployment​
C)structural unemployment​
D)frictional unemployment​
E)underemployment​

Question 74

Jacqueline has a Ph.D.in economics.She has turned down many job offers because she eventually hopes to teach at one of the top ten universities in her field.The type of unemployment she is experiencing is:​

A)frictional unemployment.
B)structural unemployment.
C)seasonal unemployment.
D)cyclical unemployment.
E)underemployment.

Question 75

Frictional unemployment refers to unemployment that is a result of:​

A)a mismatch of skills.
B)being out of work 27 weeks or longer.
C)job search.
D)seasonal decreases in demand for labor.
E)a recession in the economy.

Question 76

Which of the following is most likely to reduce structural unemployment?​

A)A reduction in wage rates
B)Access to better information on local job openings​
C)Retraining workers in marketable skills​
D)Promotion of full employment through government stabilization policies​
E)Reducing the cost of job loss through enhanced unemployment benefits​

Question 77

After graduating from Harvard Law School,Anne started looking for a job.She could not find a job after looking for one week.Which of the following is true in this case?​

A)This is an example of frictional unemployment.
B)This is an example of cyclical unemployment.
C)This is an example of seasonal unemployment.
D)She is underemployed.
E)She is a discouraged worker.

Question 78

Juanita worked for a defense contractor in the United States.During the 2008 recession,the government cut spending and Juanita and ninety-nine others were laid off.In such a case,the unemployment Juanita is experiencing is _____.​

A)cyclical
B)structural​
C)seasonal​
D)frictional​
E)voluntary​

Question 79

Unemployment arising from a mismatch of skills is called:​

A)frictional unemployment.
B)structural unemployment.
C)seasonal unemployment.
D)cyclical unemployment.
E)underemployment.

Question 80

The type of unemployment most likely to be experienced by a touring professional golfer is:​

A)frictional unemployment.
B)structural unemployment.
C)seasonal unemployment.
D)cyclical unemployment.
E)discouraged-worker unemployment.