Macro Unit 2

The natural rate of unemployment -results from dynamic changes given the institutional arrangements of the economy -results from both frictional and cyclical economic conditions -is due to the cyclical business conditions -is present when the economy is at the peak of an economic boom

results from normal dynamic changes given the institutional arrangements of the economy

Full employment is the situation in which the economy operates at an unemployment rate equal to the sum of -cyclical and frictional unemployment -structural, frictional, and cyclical unemployment -structural and cyclical unemployment -structural and frictional unemployment

structural and frictional unemployment

Which of the following is most indicative of a recession? -an increase in the interest rate -a decline in real GDP -a decline in unemployment -a rise in inflation

a decline in real GDP

The best definition of inflation is -an increase in the purchasing power of the dollar -an increase in the price of one important commodity such as food -a temporary increase in prices -a persistent increase in the general level of prices as measured by a price index

a persisten increase in the general level of prices as measured by a price index

During a recession, which o the following will be true? -the unemployment/population ratio will increase substantially -actual inflation will be higher than was anticipated -actual GDP will be lower than potential GDP -the actual rate of unemployment will be lower than the natural rate

actual GDP will be lower than potential GDP

Which of the following would be most likely to reduce the rate of unemployment? -an Internet job listing system that makes it easier to get information about job openings and available employees -an increase in unemployment compensation benefits -a rise in the minimum wage -a business recession

an Internet job listing system that makes it eaiser to get information about job openings and available employees

The actual rate of unemployment will generally -exceed the natural rate of unemployment during an economic boom period -do both a and c -increase as an economy enters an economic boom period -decrease as an economy enters an economic boom period

decrease an an economy enters an economic boom period

Structural unemployment is the result of -not enough workers to fill available jobs -slow or negative economic growth, as during a recession -inaccurate or costly information about job oppurtunities -difficulties in matching qualified worker with available jobs

difficulties matching qualified workers with available jobs

Actual GDP will be below potential GDP -during a recession -when the economy is at full employment -when resources are fully utilized -during an economic boom

during a recession

Darryl would like to work as an accountant full time. A full-time position is not available, however, so he must accept a part-time job working 15 hours per week. The Bureau of Labor Statistics would categorize Darryl as -employed -unemployed -both employed and unemployed -not in the labor force

employed

The type of unemployment resulting from the fact that labor market infomation is less than perfect is called -natural unemployment -cyclical unemployment -frictional unemployment -structural unemployment

frictional unemployment

The expansionary phase of the business cycle is characterized by -decreasing real output and increasing unemployment -increasing real output and increasing unemployment -decreasing real output and declining unemployment -increasing real output and declining unemployment

increasing real output and declining unemployment

The natural rate of unemployment -is equl to number of persons unemployed divided by the number in the labor force -is an artifically low rate that cannot be maintained -is the rate of unemployment present when the economy is operating at full employment -is a constate rate that is unaffected by changes in public policy

is the rate of unemployment present when the economy is operating at full employment

How will increased usage of the Internet by employers and employees influence the job search process? -it will make job related information less costly, and, therefore, tend to increase the rate of unemployment -it will make job related information more costly and, therefore, tend to reduce the rate of unemployment -it will make job related information more costly and, therefore, tend to increase the rate of unemployment -it will make job related information less costly and, therefore, tend to reduce the rate of unemployment

it will make job related information less costly and, therefore, tend to reduce the rate of unmployment

During an economic boom period, the actual rate of unemployment will be -unaffected by the economic expansion -equal to the natural rate of unemployment -less than the natural rate of unemployment -greater than the naural rate of unemployment

less than the natural rate of unemployment

In contrast with unanticipated inflation, anticipated inflational implies that -the increase in the general level of prices was growth of GDP -the government was informed about inflation -most decision makers expected the general increase in the price level -the increase in the genral level of prices was expected by borrowers but not by lenders

most decision makers expected the general increase in the price level

If borrowers and lenders expect a higher rate of inflation, -real interest rates will tend to rise -nominal interest rates will tend to rise -nominal interest rates will tend to fall -real interest rates will tend to fall

nominal interest rates will tend to rise

Camila is a homemaker. Last week, she was busy with her normal household activities. How would the Bureau of Labor Statistics classify her? -a memeber of the civilian labor force who is underemployed -a member of the civilian labor force who is employed -a member of the civilian labor force who is unemployed -not a member of the labor force -a discouraged worker who is not a member of the labor force

not a member of the labor force

Andrea would be considered unemployed if she is -not working and is looking for a part time job -working at a full time job but is looking for a part time job -working at a part time job but is looking for a full time job -absent from her regular job as the result of illness

not working and is looking for a part time job

When the rate of cyclical unemployment is zero, the -natural rate of unemployment must also be zero -rate of frictional unemployment must be negative -economy must have entered a recessionary stage -economy is considered to be at full employment

the economy is considered to be at full employment