Quiz- Chapter 6 Economics: Business Cycles, Unemployment, and Inflation

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

$320 billion.

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

14 Years

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

A part of frictional unemployment.

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

Capital goods and durable consumer goods.

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

During periods of full employment the:

Unemployment rate for African-Americans is twice the rate for whites.