econ chapter 6 and 7.1 quiz – Flashcards
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how do you find the unemployment rate?
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unemployed people/labor force times 100
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how do you find the participation rate?
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labor force/working age people times 100
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What is this labor market status? Don is 21 and a full time college student.
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he isn't working or looking for work, so he isn't in labor force.
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What is this labor market status? Shirley works for 20 hours a week as an administrative assistant and is looking for a full time job.
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shes working for pay for more than 1 hour a week, so she is employed and part of the labor force. she is working less than 35 hours a week, so she is part time. bc she is looking for a full time job, shirley is an involntary part time worker.
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What is this labor market status? clarence was laid off from his job selling keyboards to computer manufacturers and is actively seeking a new job.
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he is actively seeking a new job, so he is unemployed. he is part of the labor force.
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What is this labor market status? pat quit her job as an account exec. 6 months ago but, unable to find a new position, has stopped searching.
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pat isnt working or looking for work, so she isnt in labor force. she is a discouraged worker.
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T or F? If bob has been laid off by ford, but expects to be recalled within the next three weeks, he is part of the labor force.
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True
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T or F? People are counted as unemployed if they work less than 40 hours a week.
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False
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T or F? The unemployed rate decreases when unemployed workers find jobs.
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True
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T or F? the labor force participation rate measures the percentage of the labor force that is employed.
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False
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T or F? Marginally attatched workers have jobs.
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False.
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To be counted as employed by the BLS, in the week before the survey the person must have worked for pay for...
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at least 1 hour
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The U.S's labor force is larger than what?
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the number of employed and unemployed people.
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Discouraged workers and marginally attached workers are
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not part of the labor force.
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Part time workers for noneconomic reasons are people who..
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do not want to work full time.
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What criteria must a person meet to be counted as unemployed?
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The person must be without employment, available for work, and actively searching or waiting to be recalled to a job from which he or she was laid off.
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How does a discouraged worker relate to a marginally attached worker?
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marginally attached=person without a job, not loking for work, but has looked for work in the recent past. discouragd worker=marginally attached worker who is not looking forwork bc previous job searches were unsuccessful.
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Are part time workers who are part time for economic reasons counted as being employed, underemployed, or unemployed?
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underemployed!
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what is U-6?
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an alternative measure of the unemployment rate which counts discouraged workers, marginally attached workers, and pple employed part time for economic reasons as unemployed members of the labor force.
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How does unemployment rate change in a recession?
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rises
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are workers employed part time for economic reasons counted as unemployed when calculating the official U-3 unemployment rate?
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NO
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If workers employed part time for economic reasons were counted as unemployed when calculating the official U-3 unemployment rate, unemployment rate would...
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increase
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T or F? During the 2008-2009 recession, the unemployment rate that included marginally attached workers and discouraged workers as unemployed was double the unemployment rate that did not include these workers.
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False
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T or F? the number of workers employed part time for economic reasons rises during recessions.
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True
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Between 1959 and 2009...
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the male labor force participation rate decreased and the female labor force participation rate increased.
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The women's labor force participation rate is...
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higher in the U.S than in France.
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In a recession, which unemployment rate is the highest?
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The U-6 unemployment rate.
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In 2009, part time workers for noneconomic reasons were about___ of total employment and part time workers for economic reasons were about____ of total employment.
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14 percent, 6 percent.
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The number of part time workers for economic reasons ___ during recessions and the number of part time workers for noneconomic reasons ___ during recessions.
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increases, does not change
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During a recession, what happens to the unemployment rate?
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rises.
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During a recession, what happens to the number of part time workers for economic reasons?
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increases
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During a recession, what happens to the number of part time workers for noneconomic reasons?
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doesnt change
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How do the U-3, U-5, and U-6 measures of the unemployment rate differ?
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U-3= official measure (counts as unemployed only unemployed workers), U-5=counts discouraged workers and marginally attached workers as unemployed members of the labor force. U-6=measures U-5 but also counts part time workers for economic reasons as unemployed. All three measures rise when the economy enters a recession.
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During which decade (70's, 80's, or 90's) did the labor force participation rate of women increase most? Why?
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70's. cultural change-college education, technological change, more families wanted two income earners to help with their budgets.
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Unemployment that arises from normal labor market turnover?
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frictional unemployment
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unemployment that arises when changes in technology or international competition change the skills needed to perform jobs or change the location of jobs.
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structural unemployment
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unemployment that fluctuates over the business cycle, rising during a recession and falling during an expansion
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cyclical unemployment
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when there is no cylclical unemployment
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full employment
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the unemployment rate at full employment
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natural unemployment rate
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the value of real gdp when all the economy's factors of production are employed
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potential gdp
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real gdp minus potential gdp, expressed as a percentage of potential gdp.
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output gap
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Perry lost his job when foreign competition bankrupted his company. what unemployment is this?
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structurally unemployed
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sam did not like his boss and so he quit his job. what unemployment is this?
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frictionally unemployed
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sherry just graduated from college. what unemployment is this?
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frictionally unemployed
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jose was fired when his company downsized in response to a recession. what unemployment is this?
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cyclically unemployed
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pat was laid off from her job at the gap because customers liked the fashions at JCpenny better. what unemployment is this?
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frictionally unemployed.
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in a recession, what happens to the output gap?
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real gdp is less than potential gdp, so output gap is negative.
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People who become unemployed are:
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job losers, job leavers, or entrants and reentrants.
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unemployed people who stop looking for jobs are:
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withdrawals.
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the normal unemployment from labor market turnover is called:
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frictional unemployment
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the unemployment that fluctuates over the business cycle is called:
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cyclical unemployment
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when ___ unemployment equals zero, the economy is experiencing ____ employment and the unemployment rate is the ______
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cyclical, full, natural unemployment rate.
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when potential gdp exceeds real gdp, the output gap is _____ and the unemployment rate is _____ than the natural unemployment rate
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negative, higher
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T or F? if amazon.com inc. must ly off 20 percent of its workers, the laid off workers are considered job leavers.
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false
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T or F? the only way to end a spell of unemployment is by finding a job.
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false
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T or F? the unemployment that arises when technology changes is termed technological unemployoment.
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false
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T or F? when the us economy is at full employment, the unemployment rate is zero.
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false
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T or F? potential gdp is the level of real gdp produced when the economy is at full employment.
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true
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Reentrants are people who...
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have returned to the labor force.
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generally, most unemployed workers are __; the fewest number of unemployed workers are ____
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job losers, job leavers
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tommy graduates from college and starts to look for a job. tommy is..
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frictionally unemployed.
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if an entire industry relocates to a foreign country, the relocation leads to a higher rate of ____ unemployment.
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structural
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example of someone who is cyclically unemployed ?
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a car salesman who lost his job because of a recession.
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An increase in unemployment benefits ____ and an increase in international competition that changes the location of jobs ___.
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increases frictional unemployment; increases structural unemployment
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In the U.s, the highest unemployment rates occur among..
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black teenagers.
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When the economy is at full employment...
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the amount of cyclical unemployment equals zero
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When the unemployment rate is less than the natural unemployment rate, real GDP is ___ potential GDP.
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greater than
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How does unemployment end?
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people who are hires, recalls, or withdrawals.
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What are the four types of unemployment?
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frictional, structural, seasonal, or cyclical.
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What is the relationship between full employment, the natural unemployment rate, and potential GDP?
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When the economy is at full employment, the unemployment rate is the natural unemployment rate. when the economy is at full employment, the amount of gdp produced is potential gdp.
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If the unemployment rate exceeds the natural unemployment rate, what is the relationship between real GDP and potential GDP? Is the output gap at this time positive or negative?
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real gdp is less than potential gdp. negative.
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the goods and services in the cpi and the relative importance attached to each of them.
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cpi market basket.
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Cpi formula
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cost of cpi basket at current period prices/cost of cpi basket at base period prices times 100
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inflation rate formula
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(cpi in current year-cpi in previous year)/cpi in previous year times 100
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In the reference base period, CPI equals
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100
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How often does the Bureau of Labor Stats check the prices of the goods and services in the CPI basket?
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every month
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To measure changes in the cost of living.. what is used?
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inflation rate
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CPI measures...
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the average of the prices paid by urban consumers for a fixed market basket of goods and services.
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If a country had a CPI of 105.0 last year and a CPI of 102.0 this year, then...
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the avg. prices of goods and services decreased between last year and this year
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In the US, the good or service given the most weight in the CPI basket when calculating the CPI is...
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housing
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stephen...
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owes me !
