Question 1

If a person is laid-off from a job and told that they will be brought back as soon as the economy picks up and demand for their product rises, then economists call this person.

Accepted Answer

This scenario describes a situation of cyclical unemployment, which occurs due to fluctuations in the business cycle or economic activity. The person lost their job due to a downturn in the economy, and their rehiring is dependent on an improvement in economic conditions.

Question 2

With 125 million people working, 8 million out of work and looking for work, and 147 million neither working nor looking for work the unemployment rate would be

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed individuals by the labor force (the sum of employed and unemployed individuals). In this case, the labor force is 125 million + 8 million = 133 million. Therefore, the unemployment rate is 8/133, which is approximately 6.0% (option C). Option A is incorrect because it only considers the proportion of unemployed individuals among those who are currently employed. Option B is incorrect because it includes individuals who are not in the labor force in the denominator. Option D is incorrect because it includes individuals who are not in the labor force in both the numerator and denominator.

Question 3

With 125 million people working, 8 million out of work and looking for work, and 147 million neither working nor looking for work, "underemployment" would be illustrated by

Accepted Answer

Part of the 125 million holding part-time jobs when they were qualified for full-time jobs illustrates underemployment, as it means that they are not fully utilizing their skills and abilities in the workforce. The other options do not accurately reflect underemployment.

Question 4

Of these, economists consider this the worst

Accepted Answer

A depression is considered the worst economic situation as it involves a prolonged period of severe economic contraction, characterized by high unemployment, stagnant wages, and business failures. It is a severe form of a recession and can last for several years, leading to a significant decline in the standard of living for most people. In contrast, inflation, deflation, or even a recession can be relatively short-term and may not result in long-lasting economic damage.

Question 5

A 15 year old that wants a job but can't find one is

Accepted Answer

A 15-year-old who wants a job but can't find one is not included in the unemployment rate because typically, the unemployment rate calculations only include individuals who are 16 years and older and actively looking for work.

Question 6

If the unemployment rate rises because the number of people not working but searching for work rises, economists would attribute this to the

Accepted Answer

The encouraged worker effect occurs when more people start looking for work due to perceived improvements in the job market, leading to a rise in the unemployment rate as more individuals are counted as part of the labor force.

Question 7

Which of the following can make the unemployment rate fall?

Accepted Answer

The answer of Which of the following can make the...

Question 8

Real Gross Domestic Product is Gross Domestic Product

Accepted Answer

Real Gross Domestic Product (GDP) is GDP adjusted for inflation. This means that the value of goods and services produced in an economy is measured in constant prices, which allows for a more accurate comparison of economic output over time. Eliminating sales of intangible things like services, adjusting for changes in interest rates, and adjusting for the impact of pollution are not factors in calculating Real GDP.

Question 9

Which of the following can make the unemployment rate rise?

Accepted Answer

When there is an increase in the number of people who are looking for work and a decrease in the number of people with jobs, the unemployment rate will rise. Option A would actually decrease the unemployment rate because those who are not employed and not looking for work are not considered part of the labor force. Option B would only increase the labor force participation rate, but not necessarily the unemployment rate if there are sufficient job openings to absorb the increase in the labor force. Option C would directly increase the unemployment rate as it means there are fewer people with jobs.

Question 10

If the unemployment rate falls because the number of people not working but searching for work falls, economists would attribute this to the

Accepted Answer

The discouraged worker effect refers to individuals who have given up on searching for work due to a lack of employment opportunities. If the unemployment rate falls because of a decrease in the number of people actively searching for work, it is likely due to more individuals becoming discouraged and no longer seeking employment, rather than an increase in employment opportunities.

Question 11

If a person is unemployed because their industry has moved to another country, economists refer to the person as

Accepted Answer

When a person loses their job due to the decline in a particular industry, such as when a company moves to another country, they are considered structurally unemployed. This type of unemployment occurs due to shifts in the structure of the economy, causing certain jobs or industries to become obsolete or relocate.

Question 12

With 125 million people working, 8 million out of work and looking for work, and 147 million neither working nor looking for work, the "discouraged worker effect" would be illustrated by people in the

Accepted Answer

The "discouraged worker effect" refers to individuals who are not currently in the labor force (i.e. not working and not actively seeking work) but have given up on finding work due to a perceived lack of opportunities. Therefore, the best choice is B, as these are the individuals who have become discouraged and stopped searching for employment.

Question 13

With 125 million people working, 8 million out of work and looking for work, and 147 million neither working nor looking for work, the "encouraged worker effect" would be illustrated by people in the

Accepted Answer

The "encouraged worker effect" refers to individuals who were not previously looking for work starting to do so because they believe new jobs are available or the economy has improved. Option D, which involves the 147 million who were neither working nor looking for work starting to seek employment (but not necessarily finding it), best illustrates this concept.

Question 14

A 15 year old that wants a job but can't find one is

Accepted Answer

A 15-year-old is typically not counted in unemployment statistics because they are below the legal working age in many places and are not part of the labor force.

Question 15

To an economist a "market basket" is made up of

Accepted Answer

A market basket is a collection of goods and services that are regularly purchased by a typical consumer. This includes items such as food, clothing, housing, transportation, and entertainment. Economists use market baskets to track changes in prices over time and to calculate a consumer price index. Therefore, the best choice is A, as it defines a market basket as the goods average people buy and the quantities in which they buy them.

Question 16

On a graph of real gross domestic product over time, recessions appear as

Accepted Answer

Recessions are typically characterized by relatively short and shallow drops in real gross domestic product on a graph that generally shows economic growth over time. These downturns are temporary and followed by periods of recovery and expansion.

Question 17

The inflation rate is

Accepted Answer

The inflation rate is the percentage increase in the price index from one year to the next. Option A correctly describes the inflation rate. Option B describes the Consumer Price Index, which is used to calculate inflation, but is not the same as the inflation rate. Option C describes the difference between price indexes in two consecutive years, but does not take into account the percentage change. Option D is a combination of options A and C, which is not accurate as the price index difference alone does not provide the inflation rate.

Question 18

A price index

Accepted Answer

The answer of A price index
...

Question 19

In 2005, General Motors announced a 20% reduction in its staffing levels and the closure of many assembly plants. Those laid off as a result would likely be classified as

Accepted Answer

The laid-off workers resulting from GM's decision to reduce staffing levels and close assembly plants would be classified as structurally unemployed. This is because their job loss is a result of a permanent structural change in the industry, rather than a temporary situation such as seasonal or cyclical unemployment. Frictional unemployment refers to the time it takes for individuals to find new jobs after voluntarily leaving their previous ones, and is also not applicable in this situation.

Question 20

With 125 million people working, 8 million out of work and looking for work, and 147 million neither working nor looking for work, "underemployment" would be illustrated by

Accepted Answer

Underemployment is illustrated by individuals working in jobs that do not fully utilize their skills or qualifications, as described in option D.

Quiz 6: Every Macroeconomic Word You Ever Heard: Gross Domestic Product, Inflation, Unemployment, Recession, Depression

If a person is laid-off from a job and told that they will be brought back as soon as the economy picks up and demand for their product rises, then economists call this person.

With 125 million people working, 8 million out of work and looking for work, and 147 million neither working nor looking for work the unemployment rate would be

With 125 million people working, 8 million out of work and looking for work, and 147 million neither working nor looking for work, "underemployment" would be illustrated by

Of these, economists consider this the worst

A 15 year old that wants a job but can't find one is

If the unemployment rate rises because the number of people not working but searching for work rises, economists would attribute this to the

Which of the following can make the unemployment rate fall?

Real Gross Domestic Product is Gross Domestic Product

Which of the following can make the unemployment rate rise?

If the unemployment rate falls because the number of people not working but searching for work falls, economists would attribute this to the

If a person is unemployed because their industry has moved to another country, economists refer to the person as

With 125 million people working, 8 million out of work and looking for work, and 147 million neither working nor looking for work, the "discouraged worker effect" would be illustrated by people in the

With 125 million people working, 8 million out of work and looking for work, and 147 million neither working nor looking for work, the "encouraged worker effect" would be illustrated by people in the

A 15 year old that wants a job but can't find one is

To an economist a "market basket" is made up of

On a graph of real gross domestic product over time, recessions appear as

The inflation rate is

A price index

In 2005, General Motors announced a 20% reduction in its staffing levels and the closure of many assembly plants. Those laid off as a result would likely be classified as

With 125 million people working, 8 million out of work and looking for work, and 147 million neither working nor looking for work, "underemployment" would be illustrated by