Econ. Chapter 6 – Unemployment – Flashcards
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Which of the following is included in the labor force?
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A part-time store clerk who is looking for another job.
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When the labor force participation rate is declining, the
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Percentage of the working-age population that is willing and able to work is declining.
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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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If a nation experiences a year of unusually high immigration that increases the size of the labor force, we can conclude that the
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Nation's production possibilities curve will shift outward.
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When the economy is below full employment, it is producing
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Inside the production possibilities curve
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According to Okun's Law, if unemployment rises by 5 percent while 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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All of the following are true about Okun's Law except
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It indicates that GDP is not affected by unemployment.
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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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Suppose a country has 1 billion people. 75 percent of its citizens are in the labor force, with 90 million unemployed. Full employment occurs at 2 percent. Based on this information, by what percentage has real output failed to reach its potential according to the revised Okun's Law?
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20 percent
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Suppose a country has 1 billion people. 75 percent of its citizens are in the labor force, with 90 million unemployed. Full employment occurs at 2 percent. Based on this information, what is the unemployment rate?
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12.0 percent
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Which of the following groups generally has the lowest unemployment rate?
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college graduates
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When an economy enters a recession, the
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Duration of unemployment rises.
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Part-time workers who desire full-time employment are
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Underemployed but do not contribute to the unemployment statistic.
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Suppose there are 4 million people in an economy that are classified as unemployed. After a more thorough investigation, it becomes obvious that 200,000 of these people are actually phantom unemployed. As a result of this discovery, the unemployment rate will
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decrease
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A 30-year-old stay-at-home son tells his parent he is looking for work but cannot find a job. When the parent finds the son a job, he refuses to take it. The 30-year-old can best be classified as
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phantom unemployed
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When migrant workers seek employment after the crops have been picked, the unemployment rate goes up. This situation is an example of
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seasonal unemployment
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After being fired from a job, some people find that it may take several months to find a new job in the same type of work, even when the economy is not in a recession. This is an example of which of the following types of unemployment?
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frictional unemployment
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Tom worked at NASA for 13 years. In the 14th year, his job was automated, resulting in him losing his job. He looked for a new job for 18 months before finding a job in a different line of work that paid less. During his 18-month job search, Tom was considered to be
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structurally unemployed
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During an economic downturn, consumers spend considerably less on goods and services. This results in layoffs that are classified as
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cyclical
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Which of the following government programs would be most appropriate to counteract cyclical unemployment?
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Greater government expenditures to increase GDP.
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Someone 18 years old who is not employed and is not actively seeking work is considered
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not in the labor force
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An unemployed worker who wants a job but has given up in the search for a new job is referred to as a/an
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discouraged worker
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When unemployed people stop looking for jobs, the
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Unemployment rate decreases and the labor force decreases.
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When people over 16 years old start looking for jobs, the
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Unemployment rate increases and the labor force increases.
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Jim's job was transferred 800 miles away. Although his employer will let him keep his job if he goes to the new factory, Jim cannot move. Jim is
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structurally unemployed
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In the early weeks of a recession, what type of unemployment gets larger?
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cyclical
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Okun's law
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unemployment up 1% output down 2%
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unemployment rate =
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# of unemployed people / labor force
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frictional unemployment
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in between jobs
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structural unemployment
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displaced workers
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cyclical unemployment
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business cycle
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aggregate demand (AD)
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relationship between CPI and RGDP (inverse)
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change "r"
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r goes down employment goes up income goes up AD goes up
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change in "exchange rate"
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strong dollar: ex goes down, employment goes down, AD goes down weak dollar: ex goes up, employment goes up, income goes up, AD goes up
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change in "tax rates"
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taxes go up, DI goes down, AD goes down (AD1) or taxes go down, DI goes up, AD goes up (AD2)
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change in "world economy"
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PIGS - not good BRICS - good CAFTA, SAFTA
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PIGS is not good and stands for
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portugal, ireland and italy,greece,
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BRICS is good and stands for
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Brazil, Russia, India, China, South Africa
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change in "money supply"
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loose money policy (easy): MS is up, Y is up, AD is up tight money policy: MS is down, Y is down, AD is down
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Shape of AS in the long run
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vertical why? bc of the full adjustment Q stays same
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shape of AS in the short run
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positive slope or upward sloping bc partial adjustment; Q increases
