Transcript Chapter 16 Practice Quiz Tutorial Business Cycles and

Chapter 16 Practice
Quiz Tutorial
Business Cycles and
Unemployment
©2000 South-Western College Publishing
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1. The phases of a business cycle are
a. upswing and downswing.
b. full employment and unemployment.
c. peak, recession, trough, and recovery.
d. full employment, depression, expansion,
and plateau.
C. These are the four phases of changes
in real GDP which mirrors changes in
employment and other key measures of
the macro economy.
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2. The phase of a business cycle during which real
GDP reaches its minimum level is the
a. recession.
b. depression.
c. recovery.
d. trough.
D. Recession is the phase during which real
GDP fall and recovery is the phase during
which real GDP rises. Depression is an
historical reference to the deep and long
recession of the early 1930’s.
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3. Which of the following is not a variable in
the index of leading indicators?
a. New consumer goods orders.
b. Delayed deliveries.
c. New building permits.
d. Prime rate.
D. The prime rate is a lagging indicator.
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4. Which of the following is a coincident
indicator?
a. Personal income.
b. Industrial production.
c. Manufacturing and trade sales.
d. All of the above.
D. All of these will change at the same
time that real GDP changes.
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5. The labor force consists of all persons
a. 21 years of age and older.
b. 21 years of age and older who are working.
c. 16 years of age and older.
d. 16 years of age and older who are working
or actively seeking work.
D. The labor force also includes the armed
forces, but excludes the category called
“persons not in labor force.”
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6. People who are not working will be counted as
employed if they are
a. on vacation.
b. absent from their job because of bad
weather.
c. absent from their job because of a labor
dispute.
d. all of the above.
D. A person who works at least 1 hour per
week for pay or at least 15 hours per week
as an unpaid worker in a family business is
counted as employed regardless of the
special situations listed in a, b, and c.
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7. The number of people officially unemployed is
not the same as the number of people who can’t
find a job because
a. people who have jobs continue to look for
better ones.
b. the armed forces are included.
c. discouraged workers are not counted.
d. of all of the above.
C. A person can quit looking for a job because
he is discouraged after trying to find one, but
wants to work if he could find a job, yet this
person is not considered unemployed because
he is not actively seeking employment.
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8. Frictional unemployment applies to
– workers with skills not required for existing
jobs.
b. short periods of unemployment needed to
match jobs and job seekers.
c. people who spend long periods of time out
of work.
d. unemployment related to the ups and
downs of the business cycle.
B. Frictional unemployment includes people
changing jobs, initially entering the labor
force, or re-entering the labor force.
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9. Structural unemployment is caused by
– shifts in the economy that make certain job
skills obsolete.
b. temporary layoffs in industries such as
construction.
c. the impact of the business cycle on job
opportunities.
d. short-term changes in the economy.
A. Structural unemployment is long-term
unemployment because the skills of
unemployed workers do not match the
skills required for existing jobs.
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10. Unemployment that is due to a recession is
a. involuntary unemployment.
b. frictional unemployment.
c. structural unemployment.
d. cyclical unemployment.
D. Only cyclical unemployment is
attributable directly to the business cycle.
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11. The sum of the frictional and structural
unemployment rates is equal to the
a. potential unemployment rate.
b. actual unemployment.
c. cyclical unemployment rate.
d. full employment unemployment rate.
D. Full employment does not mean zero
unemployment. Even in the best times,
there is always frictional and structural
unemployment.
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12. Which of the following statements is true?
– The four phases of the business cycle, in
order, are peak, recovery, trough, and
recession.
b. When unemployment is rising, then real
GDP is rising.
c. The economic problem typically associated
with a recovery is rising unemployment.
d. Full employment exists in an economy
when the unemployment rate equals the
sum of frictional and structural
unemployment rates.
D. There will always be some people
looking for work.
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13. Which of the following groups typically has
the highest unemployment rate?
a. White men and women as a group.
b. African-American men and women as a
group.
c. Teenagers.
d. Persons who completed high school.
C.
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Civilian Unemployment Rates 2003
Demographic Groups
Overall
Male
Female
White
Hispanic
Black
Teenagers (16 - 19 years)
White males
Black males
White females
Black females
Less than high school
High school graduates
Bachelor’s degree and
other
6.0%
6.3
5.7
5.2
7.7
10.8
17.5
17.1
36.0
13.3
30.3
8.8
5.5
3.1
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14. Which of the following is true?
– The GDP gap is the difference between full
employment real GDP and actual real GDP.
b. We desire economic growth because it
increases the nation’s real GDP.
c. Economic growth is measured by the
annual percentage increase in a nation’s
real GDP.
d. Discouraged workers are a reason critics
say the unemployment rate is understated.
e. All of the above are true.
E.
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END
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