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How is unemployment defined?


A) The number of persons between the ages of 15 and 65 who worked less than 8 hours in the previous week.
B) The number of persons over the age of 15 who worked less than 8 hours in the previous week.
C) The number of persons over the age of 15 who worked at least 1 hour in the previous week.
D) The number of persons between the age of 15 and 65 who worked more than 1 hour in the previous week.
E) The number of persons 15 years of age and older who are not in gainful employment but who are actively seeking employment.

F) A) and D)
G) C) and D)

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-Refer to the above information to answer this question.By how much have prices risen over the whole of this period? A) 4.5%. B) 10.0%. C) 20.0%. D) 32.0%. -Refer to the above information to answer this question.By how much have prices risen over the whole of this period?


A) 4.5%.
B) 10.0%.
C) 20.0%.
D) 32.0%.

E) A) and D)
F) A) and C)

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What is a discouraged worker?


A) An individual who wants to work but is no longer seeking employment because of the conviction that no opportunities exist.
B) An individual who may or may not be employed.
C) An individual who is included in the unemployment statistics.
D) An individual who is not part of the working age population.
E) An individual who is employed but is seeking a different situation.

F) C) and D)
G) B) and E)

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Distinguish between demand-pull and cost-push inflation.

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Demand-pull inflation occurs when there ...

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What type of unemployment would result if an entire industry is eliminated because of new technology?


A) Cyclical unemployment.
B) Frictional unemployment.
C) Structural unemployment.
D) Unemployment would not necessarily change.

E) A) and D)
F) A) and C)

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How do economists measure the cost of unemployment?


A) By the amount by which actual GDP exceeds potential GDP.
B) By the amount by which potential GDP exceeds actual GDP.
C) By the difference between real GDP and nominal GDP.
D) By the difference between GDP and real GNP.
E) By the total costs of unemployment benefits and welfare payments that have to be paid out.

F) C) and D)
G) None of the above

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What is the accepted natural rate of unemployment for all economies?


A) 0%.
B) Less than 2%.
C) Less than 5%.
D) 5% to 7%.
E) There is no accepted rate.

F) B) and C)
G) B) and E)

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What does the GDP gap measure?


A) The difference between GNP and GDP.
B) The difference between potential GDP and actual GDP.
C) The difference between nominal GDP and real GDP.
D) The difference between this year's GDP and last year's GDP.
E) The difference between this year's potential GDP and last year's potential GDP.

F) C) and D)
G) B) and E)

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Suppose that in a particular economy there are 2 million part-time workers,10 million full-time workers,and 4 million unemployed.What is the effect on the unemployment rate of 2 million of the part-timers become full-time workers?


A) It would decrease.
B) It would increase.
C) It would remain unchanged.
D) The size of the labour force will increase.
E) There will be no immediate change,but in the long run it will decrease.

F) A) and C)
G) None of the above

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Which of the following is included in the natural rate of unemployment?


A) Frictional unemployment only.
B) Frictional and structural unemployment.
C) Frictional,structural and cyclical unemployment.
D) It can be eliminated.

E) A) and D)
F) None of the above

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The information in the following table is for the economy of Tibor: The information in the following table is for the economy of Tibor: a)What is the unemployment rate? b)What is the participation rate? c)How much inflation has occurred since the base year? a)What is the unemployment rate? b)What is the participation rate? c)How much inflation has occurred since the base year?

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-Refer to the information above to answer this question.What is the value of the GDP deflator in 2015? A) 0 B) 100.0 C) 104.8 D) 108.0 E) Cannot be determined from the information -Refer to the information above to answer this question.What is the value of the GDP deflator in 2015?


A) 0
B) 100.0
C) 104.8
D) 108.0
E) Cannot be determined from the information

F) B) and E)
G) None of the above

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A given basket of goods cost $600 in 2015;$800 in 2016;and $875 in 2017.Construct a price index for all three years,using 2016 as the base year.

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For 2015: (600/800)*...

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Which of the following would most likely decrease the rate of frictional unemployment?


A) A simultaneous increase in the number of retirements and new job seekers entering the labour force.
B) A decrease in employment insurance benefits.
C) An increase in average job search time.
D) An economic expansion.

E) C) and D)
F) B) and D)

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Which of the following are included in the consumer price index?


A) Capital goods.
B) Government spending.
C) Imports.
D) Exports.

E) None of the above
F) A) and C)

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Suppose that the representative consumer in Country ABC buys 4 units of each consumer good and the prices of each good are: Suppose that the representative consumer in Country ABC buys 4 units of each consumer good and the prices of each good are: a)What is the cost of a typical basket of consumer goods for 2015,2016,and 2017? b)Convert the cost of each bundle into a CPI using 2015 as the base year. c)What is the inflation rate for 2016 and 2017? a)What is the cost of a typical basket of consumer goods for 2015,2016,and 2017? b)Convert the cost of each bundle into a CPI using 2015 as the base year. c)What is the inflation rate for 2016 and 2017?

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a)
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All of the following except one explain why there might be job vacancies even when unemployment exists.Which is the exception?


A) Because the unemployed do not possess the necessary skills.
B) Because the unemployed do not possess the necessary experience.
C) Because the unemployed are unwilling to work.
D) Because the jobs and the unemployed might not be in the same area.

E) All of the above
F) B) and C)

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How are the participation rate and the unemployment rate measured?

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What is the output effect of inflation?


A) It involves the effect of uncertain inflation rates on the level of investment spending.
B) It is probably as much as 10 - 20% of GDP per year.
C) It is reduced as the level of growth rises.
D) It would be higher if the risks of investing were higher.

E) A) and B)
F) A) and C)

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The following are selected statistics for a given year in a hypothetical economy: The following are selected statistics for a given year in a hypothetical economy: -Refer to the information above to answer this question.What is the amount of the GDP gap? A) $20 billion. B) $475 billion. C) $435 billion. D) $25 billion. E) $525 billion. -Refer to the information above to answer this question.What is the amount of the GDP gap?


A) $20 billion.
B) $475 billion.
C) $435 billion.
D) $25 billion.
E) $525 billion.

F) A) and E)
G) B) and E)

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