Question 1

If the cyclical rate of employment equals 1 percent and the actual rate of unemployment equals 8 percent,then the natural rate of unemployment must equal:

Accepted Answer

Cyclical unemployment is the difference between the actual rate of unemployment (u )and the natural rate of unemployment (u*); in this case 1 percent = 8 percent − u*, so u* = 7 percent.

Question 2

The increasing availability of temporary job placement agencies and online job services has ______ the efficiency of matching workers and jobs and ______ the natural rate of unemployment in the United States.

Accepted Answer

The increasing availability of temporary job placement agencies and online job services has increased the efficiency of matching workers and jobs, as it is easier for job seekers to find opportunities that match their skills and preferences. This increase in efficiency has in turn reduced the natural rate of unemployment, as more people are able to find employment through these channels.

Question 3

According to the Congressional Budget Office,over the past twenty years,the natural rate of unemployment in the United States has:

Accepted Answer

The natural rate of unemployment refers to the rate of unemployment that exists when the labor market is in equilibrium, with a stable level of inflation. According to the Congressional Budget Office, over the past 20 years, the natural rate of unemployment in the United States has fallen, indicating a stronger labor market with lower unemployment rates.

Question 4

If the output gap equals 1.8 percent,then

Accepted Answer

An output gap of 1.8 percent indicates that actual GDP is 1.8 percent above potential GDP, which means there is an expansionary gap. This suggests that the economy is operating above its long-term capacity and may be experiencing inflationary pressures. The other choices are not necessarily true based solely on the information given.

Question 5

Okun's law expresses the relationship between:

Accepted Answer

Okun's law expresses the relationship between cyclical unemployment and the output gap. It suggests that for every 1% increase in the output gap (the difference between actual and potential GDP), there will be a 0.5% decrease in the cyclical unemployment rate.

Question 6

The changing age structure of the U.S.population and more efficient labor markets are both possible explanations for:

Accepted Answer

The changing age structure of the U.S. population and more efficient labor markets have both contributed to the decline in the natural rate of unemployment. As the population ages, there are more experienced workers who are less likely to be unemployed. Additionally, more efficient labor markets allow job seekers to find jobs more quickly, reducing the amount of time they spend unemployed.

Question 7

Compared to older workers,younger workers change jobs more frequently,so they are more prone to ______ unemployment and have fewer skills,so they are more prone to ______ unemployment.

Accepted Answer

The answer of Compared to older workers,younger workers change jobs...

Question 8

The natural rate of unemployment is the unemployment rate when there is only:

Accepted Answer

The natural rate of unemployment is the sum of structural and frictional unemployment as these types of unemployment are considered to be inevitable in a healthy and functioning labor market. Cyclical unemployment is caused by changes in economic conditions and is not considered to be part of the natural rate.

Question 9

If the natural rate of unemployment equals 5 percent and the actual rate of unemployment equals 6 percent,then cyclical unemployment equals:

Accepted Answer

The answer of If the natural rate of unemployment equals...

Question 10

In an expansion,the cyclical rate of unemployment is most often:

Accepted Answer

During an expansion, the economy experiences growth and creates more jobs, leading to a decrease in unemployment. Therefore, the cyclical rate of unemployment is negative, as it reflects the difference between the actual unemployment rate and the natural rate of unemployment.

Question 11

If the frictional rate of unemployment equals 3 percent,the structural rate of unemployment equals 4 percent,and the cyclical rate of unemployment equals -2 percent,then the natural rate of unemployment equals:

Accepted Answer

The answer of If the frictional rate of unemployment equals...

Question 12

The cyclical unemployment rate is zero when:

Accepted Answer

The cyclical unemployment rate is the difference between actual GDP and potential GDP. When actual GDP and potential GDP are equal, there is no cyclical unemployment and the unemployment rate is considered to be at its natural rate, which includes frictional and structural unemployment.

Question 13

The aging of the labor force in the U.S.is likely to ______ the natural rate of unemployment;an increase in the efficiency of the labor market is likely to ______ the natural rate of unemployment.

Accepted Answer

The answer of The aging of the labor force in...

Question 14

In Macroland potential GDP equals $20 billion and real GDP equals $19.2 billion.Macroland has a(n)______ gap equal to ______ percent of potential GDP.

Accepted Answer

The output gap is the difference between potential GDP and actual GDP. Since real GDP is less than potential GDP, Macroland has a recessionary gap. To calculate the percentage gap, we divide the output gap by potential GDP and multiply by 100:

Output gap = Potential GDP - Real GDP 
Output gap = $20 billion - $19.2 billion 
Output gap = $0.8 billion

Percentage gap = (Output gap / Potential GDP) x 100 
Percentage gap = ($0.8 billion / $20 billion) x 100 
Percentage gap = 4%

Therefore, the correct answer is D) recessionary; -4.

Question 15

If the frictional rate of unemployment equals 2 percent,the structural rate of unemployment equals 3 percent,and the cyclical rate of unemployment equals 1 percent,then the natural rate of unemployment equals:

Accepted Answer

The answer of If the frictional rate of unemployment equals...

Question 16

If the natural rate of unemployment equals 6 percent and the actual rate of unemployment equals 5 percent,then cyclical unemployment equals:

Accepted Answer

Cyclical unemployment is the difference between the actual rate of unemployment and the natural rate of unemployment. In this case, the natural rate of unemployment is given as 6 percent and the actual rate of unemployment is 5 percent, which means the economy is outperforming and there is less unemployment than expected given the economic conditions. Therefore, cyclical unemployment is negative, or -1 percent.

Question 17

In a recession,the cyclical rate of unemployment:

Accepted Answer

In a recession, there is a decrease in economic activity and a slowdown in demand for goods and services, which leads to a decrease in production and employment, resulting in an increase in the cyclical rate of unemployment.

Question 18

Two possible explanations for the decline in the natural rate of unemployment in the United States over the past twenty years are:

Accepted Answer

The changing age structure of the population and more efficient labor markets have contributed to the decline in the natural rate of unemployment in the US in the past 20 years.

Question 19

If the output gap equals -3.2 percent,then

Accepted Answer

An output gap of -3.2 percent indicates that actual GDP is 3.2 percent less than potential GDP. This suggests an underutilization of resources in the economy, which is characteristic of a recessionary gap. Therefore, option B is the correct choice. Option A is incorrect as the output gap provides information about the cyclical component of unemployment and not the structural or frictional component. Option C is incorrect as the output gap indicates the presence of cyclical unemployment. Option D is incorrect as a negative output gap suggests that actual GDP is less than potential GDP.

Question 20

The unemployment rate for younger workers is usually ______ the unemployment rate for older workers.

Accepted Answer

The unemployment rate for younger workers is usually greater than the unemployment rate for older workers. This is due to younger workers lacking experience and skills compared to their older counterparts, as well as higher turnover rates in entry-level positions.

Quiz 21: Short-Term Economic Fluctuations

If the cyclical rate of employment equals 1 percent and the actual rate of unemployment equals 8 percent,then the natural rate of unemployment must equal:

The increasing availability of temporary job placement agencies and online job services has the efficiency of matching workers and jobs and the natural rate of unemployment in the United States.

According to the Congressional Budget Office,over the past twenty years,the natural rate of unemployment in the United States has:

If the output gap equals 1.8 percent,then

Okun's law expresses the relationship between:

The changing age structure of the U.S.population and more efficient labor markets are both possible explanations for:

Compared to older workers,younger workers change jobs more frequently,so they are more prone to unemployment and have fewer skills,so they are more prone to unemployment.

The natural rate of unemployment is the unemployment rate when there is only:

If the natural rate of unemployment equals 5 percent and the actual rate of unemployment equals 6 percent,then cyclical unemployment equals:

In an expansion,the cyclical rate of unemployment is most often:

If the frictional rate of unemployment equals 3 percent,the structural rate of unemployment equals 4 percent,and the cyclical rate of unemployment equals -2 percent,then the natural rate of unemployment equals:

The cyclical unemployment rate is zero when:

The aging of the labor force in the U.S.is likely to the natural rate of unemployment;an increase in the efficiency of the labor market is likely to the natural rate of unemployment.

In Macroland potential GDP equals $20 billion and real GDP equals $19.2 billion.Macroland has a(n) gap equal to percent of potential GDP.

If the frictional rate of unemployment equals 2 percent,the structural rate of unemployment equals 3 percent,and the cyclical rate of unemployment equals 1 percent,then the natural rate of unemployment equals:

If the natural rate of unemployment equals 6 percent and the actual rate of unemployment equals 5 percent,then cyclical unemployment equals:

In a recession,the cyclical rate of unemployment:

Two possible explanations for the decline in the natural rate of unemployment in the United States over the past twenty years are:

If the output gap equals -3.2 percent,then

The unemployment rate for younger workers is usually ______ the unemployment rate for older workers.

Quiz 21: Short-Term Economic Fluctuations

If the cyclical rate of employment equals 1 percent and the actual rate of unemployment equals 8 percent,then the natural rate of unemployment must equal:

The increasing availability of temporary job placement agencies and online job services has ______ the efficiency of matching workers and jobs and ______ the natural rate of unemployment in the United States.

According to the Congressional Budget Office,over the past twenty years,the natural rate of unemployment in the United States has:

If the output gap equals 1.8 percent,then

Okun's law expresses the relationship between:

The changing age structure of the U.S.population and more efficient labor markets are both possible explanations for:

Compared to older workers,younger workers change jobs more frequently,so they are more prone to ______ unemployment and have fewer skills,so they are more prone to ______ unemployment.

The natural rate of unemployment is the unemployment rate when there is only:

If the natural rate of unemployment equals 5 percent and the actual rate of unemployment equals 6 percent,then cyclical unemployment equals:

In an expansion,the cyclical rate of unemployment is most often:

If the frictional rate of unemployment equals 3 percent,the structural rate of unemployment equals 4 percent,and the cyclical rate of unemployment equals -2 percent,then the natural rate of unemployment equals:

The cyclical unemployment rate is zero when:

The aging of the labor force in the U.S.is likely to ______ the natural rate of unemployment;an increase in the efficiency of the labor market is likely to ______ the natural rate of unemployment.

In Macroland potential GDP equals $20 billion and real GDP equals $19.2 billion.Macroland has a(n) ______ gap equal to ______ percent of potential GDP.

If the frictional rate of unemployment equals 2 percent,the structural rate of unemployment equals 3 percent,and the cyclical rate of unemployment equals 1 percent,then the natural rate of unemployment equals:

If the natural rate of unemployment equals 6 percent and the actual rate of unemployment equals 5 percent,then cyclical unemployment equals:

In a recession,the cyclical rate of unemployment:

Two possible explanations for the decline in the natural rate of unemployment in the United States over the past twenty years are:

If the output gap equals -3.2 percent,then

The unemployment rate for younger workers is usually ______ the unemployment rate for older workers.

The increasing availability of temporary job placement agencies and online job services has the efficiency of matching workers and jobs and the natural rate of unemployment in the United States.

Compared to older workers,younger workers change jobs more frequently,so they are more prone to unemployment and have fewer skills,so they are more prone to unemployment.

The aging of the labor force in the U.S.is likely to the natural rate of unemployment;an increase in the efficiency of the labor market is likely to the natural rate of unemployment.

In Macroland potential GDP equals $20 billion and real GDP equals $19.2 billion.Macroland has a(n) gap equal to percent of potential GDP.