Which phase of the business cycle would be most closely associated with an economic contraction?
A through in the business cycle occurs when
Employment and output reach their lowest levels
A recession is a decline in:
Real GDP that lasts six months or longer
The Great Recession in 2007 was triggered by shocks in which of the following economic sectors?
Real estate and financial markets
The production of nondurable consumer goods is more stable than:
the production of durable consumer goods
the unemployment rate is interpreted as the percentage of the:
Labor force that are not employed
Full-time homemakers and retirees are classified in the BLS data as:
Not in the labor force
The unemployed are those who are:
not employed but is seeking work
[Unemployed/labor force]x100
If the total population is 200 million. The labor force has 100 million and 92 million are employed, what’s the unemployment rate?
In calculating the unemployment rate, the “discouraged” workers who are not seeking employment are:
Excluded from the labor force
In calculating the unemployment rate, part-time workers are:
Included because they get paid for work
Official unemployment rate statistics may:
Understate the amount of unemployed because of the presence of “discouraged” workers who are not actively seeking employment
The best example f a “frictionally unemployed” worker is one who:
Is in the process of voluntarily switching jobs
a worker who loses a job at a call center because the company moved the call center to another country is an example of:
Structural unemployment
New college graduates still looking for their first jobs would be classified in the BLS data as:
Frictionally unemployed
Unemployment that occurs when there is deficient demand for the goods and services of an economy is called:
Cyclical unemployment
Structural unemployment is unemployment resulting from:
changes in the structure of consumer demand or technology
Search and wait unemployment is another way to describe:
Frictional unemployment
“Full employment” refers to the situation when there is:
No cyclical unemployment
The full-employment rate of unemployment is also called the:
Natural rate of unemployment
Potential GDP is the output that wold be produced if the economy was experiencing:
Full employment
The GDP gap measures the amount of which:
Potential GDP exceeds actual GDP
Inflation is a rise in:
The general level of prices over time
If the Consumer Price Index for a certain year is 120, this means that the average price of consumer items in that year was:
20% higher than the average price in the base period 1982-84
If the Consumer Price Indeex was 170 in one year and 180 in the next year, then the rate of inflation is approximately:
For a given amount of nominal income, the real income will:
Fall if the price level rises.
Unanticipated inflation tends to penalize:
People who save money in financial institutions
If unanticipated inflation occurs, then:
lenders are hurt and borrowers benefit.
Inflation is:
The redistributive effects of inflation are arbitrary with respect to people and groups in society
If the bank’s annual interest rate is 6% and the inflation rate is 4%, what would the bank most likely charge as an annual interest rate?