Chap 9 Quiz

A college graduate using the summer following graduation to search for a job would best be classified as:

a part of frictional unemployment.

If actual GDP is $340 billion and there is a positive GDP gap of $20 billion, potential GDP is:

$320 billion.

If the annual inflation rate is 5% a year, how many years will it take for the price level to double?

14 years

A nation has a population of 300 million people. Of these, 80 million are retired, in the military, in institutions, or under 16 years old. There are 210 million who are employed and 10 million who are unemployed. What is the unemployment rate?

4.5 percent

In which phase of the business cycle will the economy most likely experience rising real output and falling unemployment rates?

Expansion

The rate of unemployment when the economy is at its potential output is called the:

Natural rate of unemployment

In which of the following cases would real income rise?

Nominal income rises by 2 percent, and the price level remains unchanged.

Kevin has lost his job in an automobile plant because of the use of robots for welding on the assembly line. Kevin plans to go to technical school to learn how to repair microcomputers. The type of unemployment Kevin is faced with is:

Structural

The industries or sectors of the economy in which business cycle fluctuations tend to affect output the most are:

capital goods and nondurable goods

Occasionally, rapidly rising prices for basic inputs such as energy result in higher prices for many goods and services. The resulting inflation is best categorized as:

cost push inflation

At the deepest point of the Great Depression, most employment consisted of

frictional unemployment

Orlando has just finished school and is searching for his first job. Orlando is considered to be

frictionally unemployed

During periods of full employment in the US the:

unemployment rate for African-Americans is about twice the rate for whites