Unemployment and Inflation Quiz

In January 2010, the second year of Barack Obama's presidency, the national unemployment rate was

10%

Full employment is reached when the employment rate drops below _____ percent.

4.5

According to this passage: "The nation's unemployment rate rose to 4.5 percent in June as manufacturers continued to suffer heavy job losses and demand for workers in service industries fell to the lowest level in 10 months. The Labor Department reported Friday that the jobless rate rose 0.1 percentage point from a 4.4 percent rate in May. The 4.5 percent level matched the unemployment rate in April with both months representing the highest level the jobless rate has reached in the year-long economic slowdown." what was the highest level that unemployment reached that year?

4.5%

What one "luxury" does Teracita's family enjoy?

Watching TV

The most popular theory that explains the cause of inflation is ____________.

a very large increase in the money supply

Unemployment that is directly related to swings in the business cycle is

cyclical unemployment.

Choose two underlying causes of inflation.

excessive growth of money supply generous credit conditions

What type of unemployment does this passage describe? "A booming economy. Record-low unemployment. A blizzard of pink slips [a note stating that a person has been fired]. What's wrong with this picture? The fact is, even in the best of times hundreds of thousands of people lose their jobs through no fault of their own.... You might not get any advance warning, so don't be caught off guard. Have an up-to-date resume and networking system.... You want to be able to launch your job search soon after you get the bad news."

frictional

All of the following are consequences of inflation EXCEPT __________.

it alters the distribution of income wherein borrowers are generally hurt more than lenders

All of the following are different forms of unemployment, EXCEPT

non-structural.

An effective tool used to measure the price level is the ___________.

Consumer Price Index, or CPI

Inflation does all of the following EXCEPT

strengthens the value of the dollar.

Changes in technology and changes in consumer tastes can cause

structural unemployment.