Question 1

Full employment occurs when

Accepted Answer

A)   structural unemployment is zero.
B)   cyclical unemployment is zero.
C)   frictional unemployment is zero.
D)   cyclical and frictional unemployment are zero. B

Question 2

What are the three types of unemployment and how do they change over the business cycle?

Accepted Answer

The three types of unemployment are frictional, structural, and cyclical. Of these three types, the first two-frictional and structural unemployment-have no strong relationship to the business cycle. The third type, cyclical unemployment, however is the result of the business cycle. When the economy is in a recession and people lose their jobs as a result of the recession, the unemployed workers are cyclically unemployed. Conversely, when the economy is in an expansion, cyclical unemployment decreases. Hence, cyclical unemployment increases during a recession and decreases during an expansion.

Question 3

-Using the information in the above table, the unemployment rate is

Accepted Answer

A)   4.5 percent.
B)   4.3 percent.
C)   2.8 percent.
D)   6.0 percent. B

Question 4

The type of unemployment created by the normal rate of reentry and entry into the labor force is

Accepted Answer

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

Question 5

Suppose that Matt quits a job with the XYZ Corporation in order to look for more rewarding employment. Matt is best be considered as

Accepted Answer

A)   still being employed.
B)   included in the economy's "hidden employment."
C)   frictionally unemployed.
D)   cyclically unemployed.

Question 6

Suppose the population is 220 million people, the labor force is 150 million people, the number of people employed is 130 million and the working-age population is 175 million people. What is the labor force participation rate?

Accepted Answer

A)   0.68 percent
B)   68 percent
C)   85.7 percent
D)   86.7 percent

Question 7

Marginally attached workers fall into which of the following population categories?

Accepted Answer

A)   employed
B)   unemployed
C)   labor force
D)   not in the labor force

Question 8

Full employment occurs when

Accepted Answer

A)   there is no cyclical unemployment.
B)   there is no unemployment.
C)   there is no frictional unemployment.
D)   the unemployment rate is less than 5 percent.

Question 9

At the natural unemployment rate, there is no

Accepted Answer

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

Question 10

Cyclical unemployment

Accepted Answer

A)   decreases during an expansion.
B)   grows at the same rate as potential GDP.
C)   is zero at a business-cycle trough.
D)   decreases during a recession.

Question 11

The first step in measuring the CPI is to

Accepted Answer

A)   select the market basket.
B)   conduct a monthly survey.
C)   collect prices for the basket of goods and services.
D)   interview businesses.

Question 12

What is the definition of the unemployment rate? How are part-time workers and discouraged workers treated when calculating the unemployment rate?

Accepted Answer

The answer of What is the definition of the unemployment...

Question 13

The official U-3 unemployment rate

Accepted Answer

A)   includes persons without a job who have made efforts in the last week to find a job.
B)   includes persons without a job, whether they are actively searching for work or not.
C)   counts discouraged workers as unemployed.
D)   counts people with part-time jobs who want full-time jobs as unemployed.

Question 14

NPR ("Certain Green Industries Have Job Openings", November 12, 2008) reported on a story about wind turbine manufacturers in Ohio having trouble finding skilled workers. The report noted that as a result tens of thousands of people having been laid off, there is "a huge pool of job-seekers." The firms claim to "offer good pay and benefits." A representative from the United Steelworkers claims that their union members have easily transferrable skills, but the pay is too low, around $30,000 annually. A manager at Apollo Alliance says that workers in the new industry need different skills than those in the old steel industry. The type of unemployment described in the story is ________ unemployment.

Accepted Answer

A)   cyclical
B)   structural
C)   frictional
D)   efficiency wage

Question 15

Unlike cyclical unemployment, both frictional and structural unemployment rise during recessions and fall during expansions.

Accepted Answer

A) True 
 B)False

Question 16

If the population is 300 million, with 70 million under the age of 16 and institutionalized, another 70 million not in the labor force, 10 million unemployed, and 150 million employed, the employment-to-population rate is

Accepted Answer

A)   53.3 percent.
B)   65.2 percent.
C)   46.7 percent.
D)   87.5 percent.

Question 17

The labor force is defined as the number of people who

Accepted Answer

A)   are employed plus the number of people who are unemployed.
B)   are available and looking for work but are unable to find employment.
C)   would like to have a job but have stopped seeking work.
D)   would like to have a full-time job but are working part-time.

Question 18

-In the above table, the size of the labor force is

Accepted Answer

A)   210 million.
B)   155 million.
C)   140 million.
D)   100 million.

Question 19

The table below shows the price index for China starting in 2000.  www.econstats.com
Which of the following statements CORRECTLY describes the behavior of prices in China?

Accepted Answer

A)   The cost of the CPI basket decreased in 2002.
B)   China experienced a high price level and high inflation.
C)   Inflation reached 73% between the base year and 2001.
D)   The inflation rate between 2005 and 2006 was 14.4 percent.

Question 20

"The market basket used to calculate the CPI is revised monthly to more accurately depict consumers' choices. The price data for the CPI are collected every month." Are the previous sentences true or false?

Accepted Answer

The answer of "The market basket used to calculate the...

Exam 5: Monitoring Jobs and Inflation

Full employment occurs when

What are the three types of unemployment and how do they change over the business cycle?

-Using the information in the above table, the unemployment rate is

The type of unemployment created by the normal rate of reentry and entry into the labor force is

Suppose that Matt quits a job with the XYZ Corporation in order to look for more rewarding employment. Matt is best be considered as

Suppose the population is 220 million people, the labor force is 150 million people, the number of people employed is 130 million and the working-age population is 175 million people. What is the labor force participation rate?

Marginally attached workers fall into which of the following population categories?

Full employment occurs when

At the natural unemployment rate, there is no

Cyclical unemployment

The first step in measuring the CPI is to

What is the definition of the unemployment rate? How are part-time workers and discouraged workers treated when calculating the unemployment rate?

The official U-3 unemployment rate

Unlike cyclical unemployment, both frictional and structural unemployment rise during recessions and fall during expansions.

If the population is 300 million, with 70 million under the age of 16 and institutionalized, another 70 million not in the labor force, 10 million unemployed, and 150 million employed, the employment-to-population rate is

The labor force is defined as the number of people who

-In the above table, the size of the labor force is

The table below shows the price index for China starting in 2000. www.econstats.com Which of the following statements CORRECTLY describes the behavior of prices in China?

"The market basket used to calculate the CPI is revised monthly to more accurately depict consumers' choices. The price data for the CPI are collected every month." Are the previous sentences true or false?