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1) As the economy falls from the peak to the trough of the business cycle:

a. Inflationary pressures should increase as unemployment rises

b. Cyclical unemployment should increase and real GDP should decline

c. Frictional unemployment should fall because people find jobs more quickly

d. Structural unemployment will be eliminated

2) Nominal income must have fallen if real income:

a. Falls and there is inflation

b. Falls and there is deflation

c. Rises and there is inflation

d. Rises and there is deflation

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Joshua Stredder
Joshua StredderLv10
29 Sep 2019
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Related questions

QUESTION 5

Which of the following statements has been proposed as a benefit of passive policy making?

Passive policy making utilizes the rational expectations hypothesis.

Passive policy making allows for making immediate changes in response to an anticipated change in economic performance.

When using passive policy making there is no tradeoff between price stability and unemployment.

Passive policy making does not wait for the time lag between recognition of a problem and policy action before engaging in economic policies to stabilize the economy.

1.47 points

QUESTION 6

The idea of policy making taking place in response to a predetermined set of rules is referred to as

discretionary policy making.

passive policy making.

Keynesianism.

active policy making.

1.47 points

QUESTION 7

What types of unemployment will still exist when the economy is at the natural rate of unemployment?

frictional and cyclical unemployment only

frictional, structural, and cyclical unemployment

frictional and structural unemployment only

structural and cyclical unemployment only

1.47 points

QUESTION 8

The natural rate of unemployment is

the unemployment rate that exists in long-run equilibrium, after adjustments to all changes have occurred.

the unemployment rate when there is no structural unemployment.

the unemployment rate when there is no structural or cyclical unemployment.

zero.

1.47 points

QUESTION 9

According to the text, minimum-wage laws cause increases in

employment possibilities.

structural unemployment.

poverty.

productivity.

1.47 points

QUESTION 10

During a recession, the overall unemployment rate

exceeds the natural rate of unemployment.

falls below the natural rate of unemployment.

falls rapidly.

equals the inflation rate.

1.47 points

QUESTION 11

Cyclical unemployment is

the unemployment due to the unemployment benefits and welfare programs of the government.

the unemployment due to union activities and government-imposed restrictions to entry into specific occupations.

the difference between the actual unemployment rate and the natural rate of unemployment.

the difference between the unemployment rate when the economy is in a recession and the unemployment rate when the economy is at the peak of an expansion.

1.47 points

QUESTION 12

Which of the following unemployment rates can be negative?

the natural unemployment rate

the seasonal unemployment rate

the official unemployment rate reported by the Bureau of Labor Statistics

the cyclical unemployment rate

1.47 points

QUESTION 13

An unexpected increase in aggregate demand typically causes

the price level to increase but has no effect on the unemployment rate.

frictional unemployment to increase but structural unemployment to decrease.

the price level to increase and the unemployment rate to fall.

the price level to increase and the unemployment rate to increase.

1.47 points

QUESTION 14

The rate of unemployment below which the rate of inflation tends to rise and above which the rate of inflation tends to fall is known as the

non-accelerating-inflation rate of unemployment (NAIRU).

contrary rate of unemployment.

Phillips rate of unemployment.

menu cost rate of unemployment.

1.47 points

QUESTION 15

Based on the work of economist A.W. Phillips, economists concluded that

high inflation rates are associated with low unemployment rates.

higher rates of inflation are associated with higher rates of unemployment.

there is no trade-off between inflation and unemployment.

unemployment can be effectively combated by raising wages.
Use the following to answer questions 8-12:



8. Refer to thegraph above. A complete business cycle is represented by:
A) A to G B) O toC C) A to F D) C to F

9. Refer to thegraph above. A movement from point A to D represents a(n):
A) trough. B)peak. C) recession. D)expansion

10. Refer to the graph above. Amovement from point D to G represents a(n):
A) trough. B)downturn. C) recession. D)expansion

11. Refer to the graph above. Apeak occurs when the economy:
A) moves from point C to point F.C) reaches points C or F.
B) reaches points E or D D) reaches points A or B.

12. Refer to the graph above. Arecession occurs when the economy moves from point:
A) B to point E. B) C to pointF. C) A to point D. D) D topoint G.

13. Almost all economists agreethat during a(n) __________ economic policy __________ be used toimprove economic conditions
A) depression; should C) expansion; should not
B) recession; should D) boom; should not

14. Cyclical unemployment isproduced by:
A) a slowdown in economic activity.
B) economic restructuring.
C) the institutional structure of theeconomy.
D) an increase in the number of people enteringthe labor force.

15. The automation of anassembly line is likely to result in:
A) structural unemployment. C) cyclical unemployment.
B) frictional unemployment. D) seasonal unemployment.

16. The unemployment producedby fluctuations in economic activity is called:
A) frictional unemployment. C) natural unemployment.
B) cyclical unemployment. D) structural unemployment.



17. Macroeconomic policy isbelieved to be most effective in reducing:
A) frictional unemployment. C) cyclical unemployment.
B) natural unemployment. D) structural unemployment.

Unemployment and its types, and the Natural Rate of Unemployment.

1) Frictional unemployment is the result of

A) an economic recession.

B) the economic decline of major industries.

C) the normal process of jobs being created and destroyed.

D) people not getting along (having friction) with their employers.

E) changing weather throughout the year.

2) Bill has graduated with his degree in economics. Through Career Services he submitted his resume to several companies and he will visit them during the next two weeks. Bill is considered

A) not in the labor force.

B) frictionally unemployed.

C) structurally unemployed.

D) cyclically unemployed.

E) employed because he is visiting firms.

3) Structural unemployment includes people who become unemployed from

A) changes in the seasons.

B) normal changes in the labor force.

C) technological changes.

D) changes in the business cycle.

E) going back to school.

4) An employee who is fired from his or her job because he or she lacks the skills required to accomplish the task, is part of ________ unemployment.

A) frictional

B) cyclical

C) unskilled

D) structural

E) withdrawal

 

5) How would you best describe a manufacturing employee who has been fired because he was replaced by a robot (new technology) and does not have the skills necessary to help operate the robot?

A) job leaver

B) entrant/reentrant

C) cyclically unemployed

D) structurally unemployed

E) withdrawal

6) Seasonal unemployment includes people who become unemployed from

A) the seasonal weather patterns.

B) normal changes in the labor force.

C) technological changes.

D) changes in the business cycle.

E) changes in international competition.

7) Cyclical unemployment includes people who become unemployed from

A) changes in the seasons.

B) changes in international competition.

C) technological changes.

D) changes in the business cycle.

E) normal labor market turnover.

 

8) The type of unemployment that arises from a decrease in real GDP is called

A) frictional unemployment.

B) structural unemployment.

C) seasonal unemployment.

D) cyclical unemployment.

E) downturn unemployment.

9) John has been laid off from his job because of a general downturn in the economy. John's unemployment is best classified as

A) cyclical.

B) seasonal.

C) structural.

D) frictional.

E) avoidable.

 

 

10) Full employment means that

A) 100 percent of the labor force have jobs.

B) only those who are willing, able and looking for work are unemployed.

C) the cyclical unemployment rate is zero.

D) the natural unemployment rate is zero.

E) the frictional unemployment rate is zero.

 

11) The natural unemployment rate is the unemployment rate that exists when there is no

A) structural unemployment.

B) frictional unemployment.

C) cyclical unemployment.

D) cyclical or structural unemployment.

E) seasonal unemployment.

12) The natural unemployment rate equals the sum of

A) cyclical and frictional unemployment.

B) cyclical, seasonal, and structural unemployment.

C) frictional, seasonal, and structural unemployment.

D) seasonal and cyclical unemployment.

E) cyclical, frictional, seasonal, and structural unemployment.

 

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