1.
The natural rate of unemployment is:
A.
higher than the full-employment rate of unemployment.
B.
lower than the full-employment rate of unemployment.
C.
that rate of unemployment occurring when the economy is at its potential output.
D.
found by dividing total unemployment by the size of the labor force.
2.
Anne Kasperson works in her own home as a full-time caretaker and homemaker. Officially, she is:
unemployed.
employed.
not in the labor force.
in the labor force.
3.
If the unemployment rate is 9 percent and the natural rate of unemployment is 5.5 percent, then the:
frictional unemployment rate is 5.5 percent.
cyclical unemployment rate and the frictional unemployment rate together are 5.5 percent.
cyclical unemployment rate is 3.5 percent.
natural rate of unemployment will eventually increase.
4.
The presence of discouraged workers:
increases the size of the labor force, but does not affect the unemployment rate.
reduces the size of the labor force, but does not affect the unemployment rate.
may cause the official unemployment rate to understate the amount of unemployment.
may cause the official unemployment rate to overstate the amount of unemployment.
5.
Assume Smith is temporarily unemployed because he has voluntarily quit his job with company A and will begin a better job next week with company B. Smith will be considered as:
cyclically unemployed.
frictionally unemployed.
secularly unemployed.
6.
Cyclical unemployment is a consequence of:
a deficiency of aggregate spending.
the decreasing relative importance of goods and the increasing relative importance of services in our economy.
the everyday dynamics of a free labor market.
technological change.
7.
The aggregate cost of unemployment can be measured by the:
amount by which actual GDP exceeds potential GDP.
amount by which potential GDP exceeds actual GDP.
excess of real GDP over nominal GDP.
excess of nominal GDP over real GDP.