Econs Test 2

Suppose you saw a news article that quoted economists as saying that business investments have begun to decline. In which phase of the business cycle does this occur? A. recovery B. peak C. recession D. trough

recession

Casey's family raises chickens as a supplier for a major poultry firm. Casey works 20 hours a week but is not paid. Casey is a(n): A. part-time worker. B. unpaid family worker and is not part of the labor force. C. unpaid family worker and is unemployed. D. unpaid family worker and is employed.

unpaid family worker and is employed.

The natural rate of unemployment occurs when cyclical unemployment is: A. equal to structural unemployment. B. zero. C. equal to frictional unemployment. D. 5%.

zero

If there are 2,000 people in the population, 950 are employed, 50 are unemployed, and 100 are discouraged workers, what is the unemployment rate? A. 10% B. 7% C. 4.5% D. 5%

5%

Which of the following is a macroeconomic topic? A. how monetary policy affects interest rates B. how tariffs affect the price of sugar in the United States C. how interest rates determine how much a firm invests D. how the price of sugar in the United States affects domestic candy companies

A. how monetary policy affects interest rates

Kayla is a computer engineer who has been laid off as a result of the most recent downturn in the economy. What type of unemployment is Kayla experiencing? A. structural unemployment B. frictional unemployment C. cyclical unemployment D. part-time unemployment

C. cyclical unemployment

The _____ measures the average prices paid by urban consumers for a typical market basket of consumer goods and services.

CPI

Which of the following would tend to cause inflation? A. government subsidies for crop production B. a decrease in consumer income C. a glut in oil production D. an increase in consumer confidence

D. an increase in consumer confidence. (When there are plenty of customers with money to spend, businesses are not pressured to offer discounts to attract buyers. This keeps prices higher than when consumer demand is depressed.)

A U.S. automaker produces $1 million worth of automobiles in Japan and $2 million worth of automobiles in the United States. How much of that is added into the GDP of the United States? Please choose the correct answer from the following choices, and then select the submit answer button. A. $1 million B. none C. $3 million D. $2 million

$2 million

Which of the following is a macroeconomic topic? A. how the business cycle affects unemployment B. how OPEC output decisions affect the entire oil market C. how fuel prices affect airline ticket prices D. how bailouts affect the behavior of financial firms

A

After being laid off at the beginning of the 2007 recession, Gordon spent several months looking for work. He decided that landing a comparable job in the downturn was impossible, so he has given up looking for work. He is considered to be: A. underemployed. B. a discouraged worker but still in the labor force. C. unemployed. D. no longer in the labor force.

Correct: no longer in the labor force.

A U.S. automaker produces $1 million worth of automobiles in its factory in Japan. How much of that is added into the GNP of the United States? A. none B. $250,000 C. $500,000 D. $1 million

$1 million

What is a person's classification if he or she has given up actively looking for work? A. marginally attached and so part of the labor force B. unemployed C. underemployed D. a discouraged worker

a discouraged worker

A Japanese automaker produces $1 million worth of automobiles in Japan and $2 million worth of automobiles in the United States. How much of that is added into the GNP of the United States? none $2 million $1 million $3 million

none

A Japanese automaker produces $1 million worth of automobiles in its factory in the United States. How much of that is added into the GDP of the United States? A. none B. $250,000 C. $1 million D. $500,000

$1 million

_____ is(are) natural for an economy and is seen as necessary and beneficial.

Only frictional unemployment

Suppose the government passes a new law providing companies with low-cost alternative energy sources such as solar and wind. This would lead to a(n): a) increase in aggregate demand b) decrease in aggregate demand c) increase in aggregate supply d) decrease in aggregate supply

c) increase in aggregate supply

One limitation of the unemployment rate as a measure of labor market health is that it does not include: A. employed people. B. unemployed people. C. discouraged workers. D. the labor force.

Correct: discouraged workers (A discouraged worker is a person who has given up actively looking for work and as a result is no longer in the labor force.)