Deck 10: What Is Macroeconomics?

Question 1

Official unemployment is identified as when a worker:

A) who is not currently employed is searching for a job unsuccessfully.
B) who is not currently employed stops searching for a job.
C) leaves his or her job to attend school full-time.
D) retires from his or her job.
E) who is not currently employed stops searching for a job because he or she feels there is no job available for him or her.

Answer 1

who is not currently employed is searching for a job unsuccessfully.

Question 2

Workers who lose their jobs because the skill sets they possess are no longer required in the economy are considered to be:

A) discouraged workers.
B) cyclically unemployed.
C) frictionally unemployed.
D) overemployed.
E) structurally unemployed.

Answer 2

structurally unemployed.

Question 3

The Great Depression lasted most of which decade?

A) the 1920s
B) the 1930s
C) the 1940s
D) the 1910s
E) the 1950s

Answer 3

the 1930s

Question 4

Which of the following questions does the official unemployment rate answer?

A) How many people in the economy are underemployed?
B) What percentage of the labor force is classified as unemployed?
C) What is the overall health of the economy?
D) How many workers are discouraged?
E) Are people unemployed for short-term or long-term spells?

Question 5

All three types of unemployment:

A) are bad for the economy.
B) create a shortage of workers in the workforce.
C) are good for the economy.
D) are difficult on households.
E) are always the same level.

Question 6

Which of the following lists the three types of unemployment?

A) frictional, structural, and practical
B) practical, structural, and cyclical
C) frictional, unavailable, and structural
D) cyclical, practical, and unavailable
E) frictional, structural, and cyclical

Question 7

Natural unemployment is the:

A) average of frictional, structural, and cyclical unemployment.
B) sum of frictional, structural, and cyclical unemployment.
C) sum of frictional and cyclical unemployment.
D) sum of structural and cyclical unemployment.
E) sum of structural and frictional unemployment.

Question 8

Which of the following is a topic of microeconomics?

A) the level of national income
B) the level of employment in the country
C) the prices of all goods in the country
D) the profit of firms in the banking industry
E) the level of national output

Question 9

Which of the following statements about historical unemployment rate is true?

A) Since 1960 the average unemployment rate in the United States has been about 2%.
B) Since 1960 the average unemployment rate in the United States has been about 10%.
C) Since 1960 the average unemployment rate in the United States has been about 6%.
D) The unemployment rate in the United States has never fallen below 6%.
E) The unemployment rate in the United States is always above 5%.

Question 10

Which of the following people would be officially considered unemployed?

A) Mitchell, who is a full-time student working part-time at the bookstore
B) Janice, who is actively seeking a full-time job while currently working at a part-time job
C) Jade, who has stopped looking for a job because she feels there are no jobs available for her
D) Jenna, who just graduated college and is searching for a job that fits her graphic-design skills
E) Ralph, who is a stay-at-home father and is not currently looking for a job

Question 11

Workers who lose their jobs because of market innovations are considered:

A) discouraged workers.
B) cyclically unemployed.
C) frictionally unemployed.
D) structurally unemployed.
E) employed.

Question 12

The main statistic that is used to monitor unemployment in the economy is:

A) real gross domestic product (GDP).
B) the unemployment rate.
C) the unemployed-employed ratio.
D) real GDP per capita.
E) discouraged workers.

Question 13

During healthy economic periods,only _________ unemployment exist(s).

A) frictional and structural
B) cyclical
C) frictional
D) structural
E) structural and cyclical

Question 14

Between 1960 and 2014,the average unemployment rate in the United States was about:

A) 4%.
B) 6%.
C) 0%.
D) 8%.
E) 9%.

Question 15

Structural unemployment is:

A) unemployment caused by time delays in matching available jobs with workers.
B) unemployment caused by changes in the industrial makeup of an economy.
C) unemployment caused by economic downturns.
D) when a worker stops looking for a job because he or she feels no job is available for him or her.
E) not one of the three types of unemployment.

Question 16

One misconception that people often have about unemployment is that:

A) unemployment is a macroeconomic topic.
B) unemployment is important to the economy.
C) as a nation, we should aim for zero unemployment.
D) the unemployment rate does not tell the whole story about the employment situation.
E) discouraged workers are not included in the official unemployment rate.

Question 17

Which of the following two types of unemployment occur even when the economy is healthy and growing?

A) frictional and structural
B) cyclical and frictional
C) structural and cyclical
D) frictional and practical
E) structural and practical

Question 18

Which of the following is a topic of macroeconomics?

A) the income earned by a person
B) the profit earned by a firm
C) production in the computer industry
D) the price of ice cream
E) the number of people in the economy with no jobs

Question 19

Structural,frictional,and cyclical are all types of:

A) jobs.
B) price levels.
C) firm structures.
D) unemployment.
E) economic models.

Question 20

Macroeconomics is the study of:

A) individual markets.
B) the behavior of the firm.
C) the behavior of the consumer.
D) the broader economy.
E) changes in commodity prices.

Question 21

Some jobs in the economy are no longer needed after an advancement in technology.A person who loses his or her job this way would be considered:

A) frictionally unemployed.
B) cyclically unemployed.
C) structurally unemployed.
D) overemployed.
E) a discouraged worker.

Question 22

A government program that reduces the hardship of being out of work by guaranteeing that unemployed workers receive a percentage of their former incomes while they are unemployed is referred to as:

A) employment insurance.
B) unemployment insurance.
C) natural unemployment.
D) frictional unemployment.
E) structural unemployment.

Question 23

Frictional unemployment is:

A) unemployment caused by time delays in matching available jobs and workers.
B) unemployment caused by changes in the industrial makeup of an economy.
C) unemployment caused by economic downturns.
D) when a worker stops looking for a job because he or she feels no job is available for him or her.
E) not one of the three types of unemployment.

Question 24

Frictional unemployment is present in an economy because:

A) workers often need to update their skills.
B) workers take time to decide which jobs are best for them.
C) firms often lay off workers due to economic recession.
D) the unemployment rate is too low.
E) there are often changes in the industrial makeup of an economy.

Question 25

Unemployment caused by delays in matching available jobs and workers is called _________ unemployment.

A) structural
B) cyclical
C) discouraged
D) frictional
E) seasonal

Question 26

When it is difficult to hire employees,firms take ____________ to hire,which increases ____________ unemployment.

A) less time; frictional
B) less time; structural
C) longer; frictional
D) longer; cyclical
E) longer; structural

Question 27

The government has decided to give governmental grants to community colleges that offer job training for individuals who have recently been laid off due to their outmoded skills.The government is trying to reduce the level of:

A) structural unemployment.
B) frictional unemployment.
C) cyclical unemployment.
D) real gross domestic product (GDP).
E) household consumption.

Question 28

Which of the following statements about structural unemployment is true?

A) Structural unemployment can be eliminated through government intervention.
B) Structural unemployment is equal to zero when the economy is in an expansion.
C) Structural unemployment cannot be eliminated.
D) Structural unemployment is not a burden on household incomes.
E) Structural unemployment is unhealthy for the long-run growth of an economy.

Question 29

Anything that lengthens the job search process _________ unemployment.

A) increases structural
B) increases frictional
C) decreases frictional
D) increases cyclical
E) decreases structural

Question 30

Between 1980 and 2010,steel industry employment in the United States has:

A) stayed constant.
B) fallen by around 70%.
C) fallen by around 55%.
D) risen by almost 90%.
E) fallen by only 10%.

Question 31

Jamal works in a factory in Lake Zurich,Illinois,assembling toy trains.The factory owner updates the current equipment and installs new robots that can do Jamal's job.As a result,Jamal is laid off and is now unemployed.Jamal would be considered:

A) structurally unemployed.
B) cyclically unemployed.
C) frictionally unemployed.
D) overemployed.
E) a discouraged worker.

Question 32

The invention of the Internet has reduced ____________ unemployment because it allows for workers and employers to find each other more quickly.

A) structural
B) cyclical
C) discouraged
D) frictional
E) seasonal

Question 33

Some individuals are unemployed because it takes time for them to find jobs that fit their skill sets.These individuals would be considered to be:

A) frictionally unemployed.
B) cyclically unemployed.
C) structurally unemployed.
D) overemployed.
E) discouraged workers.

Question 34

Which of the following is an example of frictional unemployment?

A) Raymond loses his job as a steelworker because the economy is in a downturn.
B) Chad graduates with his master's degree in economics and is searching for an analyst job.
C) Edith has decided to retire after 35 years of working at the state prison.
D) Cameron quits his job at the circus to volunteer for the Red Cross.
E) Jasmine loses her job as a newspaper editor because the publication has gone digital.

Question 35

Which of the following is an example of structural unemployment?

A) Raymond loses his job as a steelworker because the economy is in a downturn.
B) Chad graduates with his master's degree in economics and is searching for an analyst job in Oklahoma.
C) Edith has decided to retire after 35 years of working at the state prison.
D) Cameron quits his job because he wants to become an astronaut.
E) Jasmine loses her job as a newspaper editor because the publication has gone digital.

Question 36

Nina has a part-time job as she finishes her degree in fashion design.After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set.Nina has a few interviews,but it is taking time to find the job that suits her best.Nina would be considered:

A) structurally unemployed.
B) cyclically unemployed.
C) frictionally unemployed.
D) overemployed.
E) a discouraged worker.

Question 37

Brian Murphy is a political consultant for a candidate in Massachusetts.Mr.Murphy's candidate is defeated in the November election,and as a result,Mr.Murphy finds himself unemployed.Mr.Murphy's unemployment is classified as ___________ unemployment.

A) discouraged
B) structural
C) frictional
D) cyclical
E) long-term

Question 38

Some people complain that immigrants are taking farm jobs away from American workers.Which is the best explanation for this claim?

A) The claim is true: millions of immigrants displace American farmworkers.
B) The claim is true: immigrants are better educated than American farmworkers.
C) The claim is false: across the country, American farms employ more domestic workers than immigrant workers.
D) The claim is false: Americans appear to be unwilling or unable to work on farms.
E) The claim is false: Americans can always get better work than on a farm.

Question 39

Even in years when unemployment is high and millions of Americans are looking for work,thousands of jobs every year go unfilled by Americans in the farm industry.Which is the best explanation for this phenomenon?

A) Large farm employment states discourage migration into their states.
B) Regulations prevent farmers from hiring Americans to work on farms.
C) Farmers do not advertise the availability of farm jobs.
D) Americans appear to be unwilling or unable to work on farms.
E) Americans do not have the educational skills required for farm work.

Question 40

JTKB is an accounting firm in South Orange County,Florida.Company policy is that whenever JTKB decides to open up a new accounting position,the hiring manager must conduct at least five interviews over a two-week span.Because of this process,JTKB is increasing ____________ in South Orange County,Florida.

A) the number of discouraged workers
B) structural unemployment
C) cyclical unemployment
D) frictional unemployment
E) labor-force participation

Question 41

An unemployment rate that is above the natural rate indicates ________ unemployment,and we say that the economy is producing ________ the full employment output level.

A) cyclical; at more than
B) cyclical; at
C) cyclical; at less than
D) frictional; at more than
E) frictional; at

Question 42

The government can assist in reducing the level of structural unemployment by:

A) providing unemployment benefits.
B) establishing government regulations on hiring employees.
C) subsidizing the relocation of workers who lose their jobs.
D) instituting a minimum-wage law.
E) incentivizing companies to move their production overseas.

Question 43

During economic downturns:

A) the unemployment rate declines.
B) the unemployment rate rises.
C) household income rises.
D) output rises.
E) real gross domestic product (GDP) rises.

Question 44

Some individuals are unemployed because they are laid off from their jobs when the economy is sluggish.These individuals would be considered:

A) frictionally unemployed.
B) cyclically unemployed.
C) structurally unemployed.
D) overemployed.
E) discouraged workers.

Question 45

Government policies such as unemployment compensation and government regulations related to hiring and firing employees result in _________ unemployment.

A) lower frictional
B) lower structural
C) higher frictional
D) lower cyclical
E) higher structural

Question 46

The government can assist in reducing the level of structural unemployment by:

A) providing unemployment insurance.
B) establishing government regulations on firing employees.
C) taxing employers who hire low-skilled workers.
D) providing job-training programs.
E) incentivizing companies to update their current technology.

Question 47

The 2007-2009 recession lasted for ________ months.

A) 12
B) 18
C) 36
D) 6
E) 24

Question 48

In November 2009,the United States was in a deep recession.To help keep the economy afloat,the government extended the period of time one could receive unemployment insurance to 99 weeks.This policy had an unintended consequence because:

A) workers searched for jobs for longer, which reduced the unemployment rate.
B) many workers quit their jobs so they could receive unemployment insurance.
C) workers spent more time searching for the perfect job, which increased frictional unemployment.
D) employers were more hesitant to fire workers, which reduced the unemployment rate.
E) employers were more hesitant to fire workers, which increased the unemployment rate.

Question 49

During a recession,fewer individuals fly across the country for vacations.As a result,many pilots and flight attendants lose their jobs.The pilots and flight attendants would be classified as:

A) frictionally unemployed.
B) discouraged workers.
C) structurally unemployed.
D) overemployed.
E) cyclically unemployed.

Question 50

During normal economic times,unemployment in Italy tends to be ____________ than in the United States mainly because of ____________.

A) higher; labor market regulations
B) lower; labor market regulations
C) higher; exchange rates
D) longer; exchange rates
E) higher; cyclical unemployment

Question 51

In macroeconomics:

A) output and income are very different concepts.
B) output and income are essentially identical.
C) output is less than income.
D) output is greater than income.
E) income is measured in dollars but output is not.

Question 52

GDP is best defined as the total market value of all ___________ produced within a country within a given time.

A) goods and services
B) final goods and services
C) services
D) goods
E) final goods

Question 53

The recession of 2007-2009 has been dubbed the:

A) Great Depression.
B) Grand Recession.
C) Grand Depression.
D) Big Recession.
E) Great Recession.

Question 54

During healthy economic periods,cyclical unemployment:

A) rises.
B) will equal structural unemployment.
C) falls toward zero.
D) will equal frictional unemployment.
E) will equal the natural rate of unemployment.

Question 55

One argument against unemployment insurance is that it:

A) limits the effects of a recession.
B) is only available during recessions.
C) creates an indirect incentive that can make it less attractive for workers to stay unemployed.
D) can be extended by the government during times of recession.
E) creates an indirect incentive that can make it more attractive for workers to stay unemployed.

Question 56

When GDP increases,national income ________ and national output __________.

A) is unaffected; is unaffected
B) increases; increases
C) decreases; decreases
D) increases; is unaffected
E) is unaffected; decreases

Question 57

The Internet has enabled workers and companies to find each other more quickly and to make better matches with substantially lower costs.The result is ___________ unemployment.

A) lower frictional
B) lower structural
C) higher frictional
D) lower cyclical
E) higher structural

Question 58

Cyclical unemployment is:

A) unemployment caused by time delays in matching available jobs and workers.
B) unemployment caused by changes in the industrial makeup of an economy.
C) unemployment caused by economic downturns.
D) when workers stop looking for jobs because they feel no jobs are available for them.
E) not one of the three types of unemployment.

Question 59

An economic downturn can lead to mainly which type of unemployment?

A) cyclical
B) frictional
C) seasonal
D) structural
E) practical

Question 60

Joe owns a crab shack.When he produces and sells ________ meals in a given day,his income earned will ________.

A) more; stay the same
B) more; increase
C) more; decrease
D) fewer; stay the same
E) fewer; increase

Question 61

To determine living standards for the average person,we calculate:

A) GDP.
B) per capita GDP.
C) the average level of prices in the country.
D) the length of time the average person is unemployed.
E) the growth rate of GDP.

Question 62

To evaluate the change in average living standards over time,it is best to use:

A) the inflation rate.
B) GDP.
C) GDP per capita.
D) real GDP per capita.
E) real GDP.

Question 63

Country A has a GDP of $200,000 and a population of 1,000.Country B has a GDP of $400,000 and a population of 4,000.Which of the following is true?

A) The value of output is higher in country A.
B) The value of income is higher in country A.
C) The value of GDP per capita is higher in country A.
D) The value of GDP per capita is higher in country B.
E) The average living standard is higher in country B.

Question 64

The difference between non-adjusted GDP and real GDP is:

A) real output growth.
B) the price level.
C) nominal output growth.
D) long-run trend GDP.
E) average output growth.

Question 65

Consider the following data to answer the questions that follow.

Which country has the lowest average living standard?

A) A
B) B
C) C
D) D
E) E

Question 66

Consider the following data to answer the questions that follow.

Although countries C and D have the same level of GDP,country C has a level of per capita GDP that is ________ times that of country D.

A) 2
B) 3
C) 4
D) 5
E) 10

Question 67

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the questions that follow.

The market value of pizza is:

A) $25 million.
B) $10 million.
C) $2.5 million.
D) $250 million.
E) $750 million.

Question 68

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the questions that follow.

Assuming these are the only two goods produced in the economy,what is the value of the GDP?

A) $110 million
B) $750 million
C) $2 million
D) $250 million
E) $500 million

Question 69

Consider the following data to answer the questions that follow.

Which country has the highest level of GDP per capita?

A) A
B) B
C) C
D) D
E) E

Question 70

A shortcoming of non-adjusted GDP is that:

A) an increase in non-adjusted GDP can be caused by changes in either price or quantity.
B) it does not measure changes in employment.
C) it does not measure changes in price.
D) it does not include net exports.
E) it does not include the value obtained through purchases of stocks and bonds.

Question 71

In a given year,if real GDP equals non-adjusted GDP,then:

A) output did not grow.
B) there was no inflation.
C) output was over-adjusted for inflation.
D) the growth in output was equal to the growth in the price level.
E) the growth in output was greater than the growth in the price level.

Question 72

Real GDP is GDP adjusted for changes in:

A) overall employment levels.
B) overall price levels.
C) overall output levels.
D) the level of the interest rate.
E) the level of unemployment.

Question 73

Between two given years,if real GDP and non-adjusted GDP grow at the same rate,then:

A) the price level increased.
B) prices must have remained constant between the two years.
C) quantities must have remained constant between the two years.
D) prices and quantities must have remained constant between the two years.
E) prices and quantities must have grown at the same rate between the two years.

Question 74

Consider the following data to answer the questions that follow.

If these are the only five countries in the world,then country B produces _______ of world GDP.

A) 50%
B) 25%
C) 20%
D) 62.5%
E) 30%

Question 75

The best measure of the average living standards of people in the country is the:

A) dollar value of final goods and services produced.
B) dollar value of final goods and services produced per person.
C) amount of final goods and services produced.
D) amount of final goods and services produced per person.
E) average price of final goods and services produced.

Question 76

Consider the following data, which shows the quantities and prices of two goods produced in the economy, to answer the questions that follow.

The market value of cell phones is:

A) $5 million.
B) $100 million.
C) $500 million.
D) $20 million.
E) $750 million.

Question 77

Consider the following data to answer the questions that follow.

Which two countries have the same average living standard?

A) B and C
B) C and D
C) A and B
D) C and E
E) A and E

Question 78

Economic growth is best measured by changes in:

A) non-adjusted GDP.
B) real GDP.
C) the inflation rate.
D) the unemployment rate.
E) the number of jobs.

Question 79

GDP is a good,but not the best,measure of:

A) the percentage change in the overall level of prices.
B) income inequality.
C) average living standards.
D) environmental quality.
E) the cost of living.

Question 80

GDP increases if prices decrease by ________ and quantities produced increase by ________.

A) 2%; 4%
B) 2%; 2%
C) 4%; 2%
D) 3%; 1%
E) 3%; 3%