Macro Ch 9 & 10

When the economy is at full​ employment,

All the above

Which of the following causes changes in the CPI to overstate the true inflation​ rate?

All the above

Which of the following is an example of structural​ unemployment?

Due to technological change, typewriter workers lose jobs and must retrain to find jobs in other industries

What is the general relationship between the business cycle and unemployment and​ inflation?

During an​ expansion, unemployment falls and inflation increases.

Suppose John Q. Worker is currently unemployed. Each​ day, John Q. Worker spends the entire day searching available job openings for an appropriate position given his set of​ skills, abilities, and interests. If someone asks John Q. what he does for​ work, he tells them that he is currently​ "in-between jobs." Which of the following best classifies John​ Q.'s unemployment​ status?

Frictionally unemployed

Which of the following is an example of cyclical​ unemployment?

In an economic downturn, a manufacturing plant reduces production and temporarily lays off workers

During a recession, which of the following is most likely to be true?

Rising unemployment reduces income, which further decreases spending

In the beginning of a recession, which of the following is most likely to be true?

Spending by firms on capital goods is declining

The​ short-term unemployment that arises from the process of matching workers with jobs is called

frictional unemployment