Unemployment 30 question review

Dr. Homer Simpson, an economics professor, decided to take a year off from teaching to run a commercial fishing boat in Alaska. That year, Professor Simpson would be officially counted as:

employed

the rate of inflation can be found by subtracting

last year's price index from this year's price index and dividing the difference by last year's price index.

cost-push inflation

moves the economy inward from its production possibilities curve.

capitalist economies have been characterized by:

occasional instability of employment and price levels

the unemployment rate is

percentage of the labor force which is out of work

if the unemployment rate is 9 percent, we can infer that

potential GDP is in excess of actual GDP

inflation means that

prices in the aggregate are rising, although some particular prices may be falling

a recession is period in which

real domestic output falls

unanticipated inflation benefits debtors at the expense of creditors [true or false?]

true

the united states economy is considered to be at "full employment" when

100 percent of the labor force is employed

refer to the above information. the unemployment rate is

12.5 percent

When the U.S economy has achieved "full employment" the unemployment rate is at or below

5.5 percent

If the rate of inflation is 12 percent per year, the price level will double in about:

6 years

Assume the natural rate of unemployment in the U.S. economy is 5 percent and the actual rate of unemployment is 9 percent. According to Okun's law, the negative GDP gap as a percent of potential GDP is:

8 percent

the phase of the business cycle in which real domestic output declines is called

a recession

if the unemployment rate is 9 percent and the natural rare of unemployment is 5.5 percent, then the

cyclical unemployment rate is 3.5 percent

the GDP gap measures the

amount by which potential GDP exceeds actual GDP

Who is least likely to be hurt by unanticipated inflation?

an owner of a small business

In the United States, the rate of unemployment is highest for

black teenagers

As applied to the price level, the "rule of 70" indicates that the number of years required for the price level to double can be found by:

dividing the annual rate of inflation into "70"

the production of durable goods varies more than the production of nondurable goods because

durables purchases are postponable and producers of durables have monopoly power

Kimberly voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree. With degree in hand she is now searching for a position in management. Kimberly presently is:

frictionally unemployed

assume smith is temporarlity unemployed because he has voluntarily quit his job with company A and will begin a better job next week with company B. Smith will be considered as

frictionally unemployed

Suppose that a person's nominal income rises from $10,000 to $12,000 and the consumer price index rises from 100 to 105. The person's real income will:

rise by about 15 percent

Okun's law:

shows the relationship between the unemployment rate and the size of the negative GDP gap

Eckstein has lost her job in a Massachusetts textile plant because of import competition. She intends to take a short course in electronics and move to California where she anticipates that a new job will be available. We can say that Eckstein is faced with:

structural unemployment

the natural rate of unemployment is

that rate of unemployment occurring when the economy is at its potential output

if actual GDP is less than potential GDP

the actual unemployment rate will be higher than the natural unemployment rate.

during a serious recession we would expect output to fall the most in

the machine tool industry

the phase of the business cycle where real domestic output is at a minimum is called

the trough