Question 1

A recession causes a decrease in the demand for housing, resulting in substantial layoffs in the construction industry. This is an example of

Accepted Answer

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

Question 2

The total civilian labor force is comprised of

Accepted Answer

A)   the unemployed and the employed.
B)   only the employed.
C)   all individuals over 16 years of age, whether or not they work or are seeking work.
D)   only full-time employed individuals between the ages of 18 and 55.E) A) and C)
F) None of the above

Question 3

A decline in business activity is called

Accepted Answer

A)   a recession.
B)   a trough.
C)   an expansion.
D)   a peak.E) A) and C)
F) A) and B)

Question 4

The purchasing power of money increases when

Accepted Answer

A)   the inflation rate increases.
B)   there is inflation.
C)   there is deflation.
D)   there are more dollars in the economy.E) A) and C)
F) All of the above

Question 5

The unemployment rate reported by the Bureau of Labor Statistics includes all of the following type of unemployment with the exception of

Accepted Answer

A)   frictional unemployment.
B)   structural unemployment.
C)   hidden unemployment.
D)   cyclical unemployment.E) A) and B)
F) C) and D)

Question 6

Examples of external shocks are all of the following EXCEPT

Accepted Answer

A)   war.
B)   drought.
C)   oil shock.
D)   U. S. federal tax policies.E) B) and C)
F) A) and D)

Question 7

According to business activity charts for the last 100 years, the point of the highest business activity in the United States occurred

Accepted Answer

A)   during the 1920s bull market boom.
B)   during World War II.
C)   during the Vietnam War.
D)   during the Clinton administration.E) A) and C)
F) None of the above

Question 8

When Joe, who is among the highest-paid workers in a field in which there are numerous job openings across the nation, recently became unemployed, his opportunity cost of job search is

Accepted Answer

A)   average, so the length of his period of unemployment is likely to be long.
B)   relatively high, so the length of his period of unemployment is likely to be short.
C)   relatively low, so the length of his period of unemployment is likely to be long.
D)   relatively high, so the length of his period of unemployment is likely to be long.E) A) and C)
F) All of the above

Question 9

By definition, the purchasing power of money always drops when

Accepted Answer

A)   inflation occurs.
B)   deflation occurs.
C)   the economy is experiencing full employment.
D)   there is a presidential election year.E) A) and D)
F) All of the above

Question 10

Fully anticipated inflation occurs when

Accepted Answer

A)   the actual inflation rate equals the anticipated inflation rate.
B)   the actual inflation rate is less than the anticipated inflation rate.
C)   the inflation rate is zero.
D)   the anticipated inflation rate and the unanticipated inflation rate are equal.E) B) and C)
F) All of the above

Question 11

Debtors gain and creditors lose when

Accepted Answer

A)   the anticipated rate of inflation is greater than the actual rate of inflation.
B)   the anticipated rate of inflation is less than the actual rate of inflation.
C)   the anticipated rate of inflation is the same as the unanticipated rate of inflation.
D)   the unanticipated rate of inflation is zero.E) A) and B)
F) B) and C)

Question 12

If Tim works at home taking care of the household

Accepted Answer

A)   he is part of the labor force.
B)   he is not part of the labor force.
C)   he is considered to be employed.
D)   he is considered to be unemployed.E) None of the above
F) C) and D)

Question 13

Unemployment is a

Accepted Answer

A)   flow concept.
B)   stock concept.
C)   both a flow and a stock concept.
D)   neither a stock nor a flow concept.E) None of the above
F) A) and B)

Question 14

Frictional unemployment always exists because

Accepted Answer

A)   some workers quit their jobs without having another job already lined up.
B)   the government has never instituted full employment policies.
C)   workers are lazy and refuse to accept certain jobs.
D)   recessions are necessary sometimes to keep the economy healthy.E) A) and C)
F) B) and D)

Question 15

What are the four criteria used by the Bureau of Labor Statistics to determine whether an individual is unemployed or not?

Accepted Answer

First are job losers, who became unemplo...

Question 16

When the unanticipated inflation rate is zero

Accepted Answer

A)   creditors gain at the expense of debtors.
B)   debtors gain at the expense of creditors.
C)   neither creditors not debtors gain or lose.
D)   both creditors and debtors lose at the expense of the government.E) A) and C)
F) C) and D)

Question 17

Frictional unemployment is

Accepted Answer

A)   related to job search difficulties for potential workers.
B)   a result of a poor match of worker's abilities and skills with current requirements of employers.
C)   a result of business recessions that occur when aggregate demand is insufficient to create full employment.
D)   a result of the seasonal pattern of work in specific industries.E) A) and B)
F) A) and C)

Question 18

The definition of a job loser is an individual

Accepted Answer

A)   who quits his job voluntarily.
B)   whose employment was terminated involuntarily due to a downturn in the economy.
C)   who competed for a promotion at his company and did not get it.
D)   who is underemployed.E) B) and D)
F) B) and C)

Question 19

Fred recently lost his job as a teller at the bank. The bank explained that they were replacing Frank and others with ATM machines. Fred falls into a category of unemployment known as

Accepted Answer

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

Question 20

If an outdoor vendor loses her job when winter weather comes, this individual is

Accepted Answer

A)   seasonally unemployed.
B)   cyclically unemployed.
C)   structurally unemployed.
D)   chronically unemployed.E) B) and D)
F) B) and C)

Exam 7: The Macroeconomy: Unemployment, Inflation, and Deflation

By definition, the purchasing power of money always drops when

Correct AnswerverifiedShow Answer

What are the four criteria used by the Bureau of Labor Statistics to determine whether an individual is unemployed or not?

Correct AnswerverifiedFirst are job losers, who became unemplo...View AnswerShow Answer

When Joe, who is among the highest-paid workers in a field in which there are numerous job openings across the nation, recently became unemployed, his opportunity cost of job search is

Correct AnswerverifiedShow Answer

Examples of external shocks are all of the following EXCEPT

Correct AnswerverifiedShow Answer

A decline in business activity is called

Correct AnswerverifiedShow Answer

When the unanticipated inflation rate is zero

Correct AnswerverifiedShow Answer

Fred recently lost his job as a teller at the bank. The bank explained that they were replacing Frank and others with ATM machines. Fred falls into a category of unemployment known as

Correct AnswerverifiedShow Answer

The unemployment rate reported by the Bureau of Labor Statistics includes all of the following type of unemployment with the exception of

Correct AnswerverifiedShow Answer

The total civilian labor force is comprised of

Correct AnswerverifiedShow Answer

Debtors gain and creditors lose when

Correct AnswerverifiedShow Answer

A recession causes a decrease in the demand for housing, resulting in substantial layoffs in the construction industry. This is an example of

Correct AnswerverifiedShow Answer

Unemployment is a

Correct AnswerverifiedShow Answer

Fully anticipated inflation occurs when

Correct AnswerverifiedShow Answer

The purchasing power of money increases when

Correct AnswerverifiedShow Answer

The definition of a job loser is an individual

Correct AnswerverifiedShow Answer

If Tim works at home taking care of the household

Correct AnswerverifiedShow Answer

According to business activity charts for the last 100 years, the point of the highest business activity in the United States occurred

Correct AnswerverifiedShow Answer

Frictional unemployment always exists because

Correct AnswerverifiedShow Answer

If an outdoor vendor loses her job when winter weather comes, this individual is

Correct AnswerverifiedShow Answer

Frictional unemployment is

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
First are job losers, who became unemplo...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified