Exam 8: Economic Fluctuations, Unemployment, and Inflation

A) increase in frictional unemployment.
B) increase in cyclical unemployment.
C) increase in actual unemployment.
D) decrease in the natural rate of unemployment.

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A) Real GDP rises, and unemployment falls.
B) Real GDP declines, and inflation rises.
C) Interest rates rise, and the number of business failures rise.
D) Inflation rises, and employment falls.

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A) a business recession
B) an Internet job listing system that makes it easier to get information about job openings and available employees
C) an increase in unemployment compensation benefits
D) a rise in the minimum wage

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A) some workers will always have few skills.
B) unemployment will always rise during the recessionary phase of the business cycle.
C) the economy is characterized by dynamic change and imperfect information.
D) not every member of society is capable of participating in the labor force.

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A) an inflation rate that is equal to 4.5 percent.
B) an unanticipated increase in the general level of prices.
C) an increase in the general level of prices that was accurately anticipated.
D) an inflation rate that is less than what people anticipated.

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A) is based on the premise that an economy with an efficient labor market will experience no unemployment.
B) reflects the "shopping" of employees looking for employment and of employers seeking to hire workers.
C) indicates that full employment is present when the actual rate of unemployment is below the natural rate.
D) reflects the impact of an economic contraction.

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A) frictionally unemployed.
B) cyclically unemployed.
C) seasonally unemployed.
D) structurally unemployed.
E) unwise to quit his job without already having another one.

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A) the number of persons employed divided by the number of persons unemployed.
B) the number of persons 16 years of age and older who are either employed or actively seeking work divided by the total noninstitutional population 16 years of age and older.
C) the number of persons employed divided by the number of persons 16 years of age and older.
D) the number of persons who are actively seeking work divided by the number of persons who are employed.

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A) less than the natural rate of unemployment.
B) greater than the natural rate of unemployment.
C) equal to the natural rate of unemployment.
D) unaffected by the economic contraction.

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A) When such rates are present, it will be difficult for people to accurately forecast next year's rate of inflation.
B) Inflation of this type will help promote economic growth and the efficient use of resources.
C) People will respond to such rates by spending more time producing and less time trying to protect their wealth and income from the uncertainty created by the inflation.
D) Inflation of this type will improve the information content delivered by market prices.

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A) a parent who works 50 to 60 hours per week caring for family members
B) an construction worker vacationing in Florida who is on layoff due to bad weather conditions in his home state
C) a 21-year-old full-time college student
D) a 17-year-old high school student who works a newspaper route six hours per week

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A) The unemployment rates of the major European economies were substantially lower than in the United States during the last decade.
B) High unemployment rates over lengthy time periods are indicative of structural and regulatory factors that are exerting an adverse impact on the natural rate of unemployment.
C) The natural rate of unemployment is unaffected by changes in the age composition of the labor force (for example, an increase in the relative number of youthful workers) .
D) Institutional changes such as an increase in the minimum wage may increase cyclical unemployment but will not affect the natural rate of unemployment.

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A) a retired construction worker
B) a part-time worker looking for a full-time job
C) a construction worker laid off due to cold weather
D) a full-time college student who is not a member of the labor force

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A) cyclical unemployment only
B) structural unemployment only
C) frictional, cyclical, and seasonal unemployment only
D) frictional, seasonal, and structural unemployment only
E) there will be no unemployment in an economy that is at the potential output level

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a.The business cycle is the periodic inc...

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A) all salary offers are below what the person expected.
B) the marginal benefit expected from additional search exceeds the marginal cost.
C) job openings are available in the individual's field.
D) information is available that the individual has not yet collected.

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A) working at a part-time job but is looking for a full-time job.
B) absent from her regular job as the result of illness.
C) working at a full-time job but is looking for a part-time job.
D) not working and is looking for a part-time job.

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A) decision makers underestimated the rate of inflation during the year.
B) decision makers overestimated the rate of inflation during the year.
C) decision makers accurately forecast the rate of inflation during the year.
D) the rate of inflation during the year was 4.5 percent.

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