Chapter 6

Economic growth is measured by the annual percentage increase in a nation's level of: real GDP deflator. nominal GDP. real GDP. economic indicators.

real GDP.

In Exhibit 6-1, point E represents: peak and a trough. recession and a peak. recovery and a peak. recession and a trough.

recession and a trough.

One problem with the unemployment rate is that: all of these are problems. discouraged workers are included in the calculation. underemployment is measured in the calculation. the data includes part-time workers as fully employed.

the data includes part-time workers as fully employed.

Which of the following statements would come from someone classified as unemployed? I'm not working because I'm going to Jamaica with my buddy. I'm not working. I had three interviews this week, and I'm trying to find a job. I haven't had a job in a year, and I stopped looking for a job nine months ago. I'm a full-time student at the University of Illinois who doesn't have time to work. I can't stand my current job as a telemarketer. I used to be a nuclear engineer.

I'm not working. I had three interviews this week, and I'm trying to find a job.

What stage of the business cycle immediately follows the trough? Peak. Recession. Recovery. Depression.

Recovery.

The unemployment rate will decrease whenever there is a(n): decrease in the number of unemployed and the population does not change. decrease in the size of the population and there is no change in the number of persons classified as employed. decrease in the number of unemployed relative to the size of the labor force. reduction in the size of the labor force. increase in the number of persons classified as unemployed.

decrease in the number of unemployed relative to the size of the labor force.

A long and deep recession in the business cycle is: unavoidable. unemployment. a trough. a recession. a depression

depression

A discouraged worker is one who: quits his/her job because the possibility of advancement was very low. dislikes the current job but is afraid to quit. drops out of the civilian labor force because he/she cannot find a job. is overqualified for the current job. is underqualified for the current job.

drops out of the civilian labor force because he/she cannot find a job.

Elisa Kilhafer, a housewife in St. Louis, Missouri, who claims on a Bureau of Labor Statistics (BLS) survey that she is neither gainfully employed nor looking for work, is, according to the BLS, counted as a member of the labor force. considered reemployable. counted as unemployed. considered retired. not counted as a member of the labor force.

not counted as a member of the labor force.

Suppose the official unemployment rate is 10 percent. We can conclude without question that: one of every 10 people in the civilian labor force is currently unemployed. the same 10 percent of the people in the economy were out of work for the entire ear. the same 10 percent of the people in the civilian labor force were out of work for the entire year. 10 percent of the people in the economy were out of work for 10 percent of the year. every person in the civilian labor force was out of work for 10 percent of the year.

one of every 10 people in the civilian labor force is currently unemployed. the same 10 percent of the people in the economy were out of work for the entire ear.