ECON 2301 Chapter 6 – Flashcards
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All of the following are considered to be possible side effects of increased unemployment except:
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Decreased stress levels
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Jack graduated from college last month, but he has not yet started looking for a job, Jack is:
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Not part of the labor force and is not counted in the unemployment rate
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What is the likely consequence of an unemployment rate falling below the rate at which "full employment" is achieved?
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Increased inflationary pressures
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Unemployment is defined as:
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The inability of labor force participants to find jobs.
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Suppose a country has 1 billion people, 75 percent of whom are in the labor force, with 90 million unemployed. Full employment occurs at 2 percent. Based on the information above, by what percentage has real output failed to reach its potential according to the revised Okun's Law?
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24%. Unemployment is 12%. Okun's law: 1 percent unemployment results in 2 percent less output.
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According to Okun's Law, if unemployment rises by 5 percent wihile imports and exports increase at roughly the same rate, the economy will lose output equal to:
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10 percent
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3.3 percent Unemployment = number/labor force
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What is the unemployment rate in 2004?
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Suppose a country has 10 million people, three-fourths of those individuals are in the labor force, with 500,000 unemployed. Full employment occurs at 5 percent. What is the unemployment rate?
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6.67 percent
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Unemployment was particularly high during:
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The Great Depression
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Which of the following is included in the labor force?
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The president of Microsoft
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17.5 percent
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What is the unemployment rate in 2006
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The labor-force participation rate is the number:
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In the labor force divided by the total population
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If the population of a country is 250,000 people, its labor force consists of 145,000 people, 35,000 people are unemployed, 10,000 are unable to work, and 5,000 are unwilling to work, the unemployment rate is:
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24.1 percent
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When the U.S. unemployment rate decreased in the late 1990s, so did all of the following except:
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Income per capita.
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Full employment in the U.S. economy means that:
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The economy has reached the lowest level of unemployment compatible with price stability.
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The type of unemployment that economists generally associate with normal growth of the labor force and expanding job opportunities in a dynamic economy is:
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Frictional unemployment.
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