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Mid Term Macroeconomic Chapter 16

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Cyclical unemployment
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occurs because of recessions
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Martin Shore lost his job when General Motors closed its local plant. He has been visiting the personnel offices of the other factories in the area looking for a new job. he is
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a member of the civilian labor force who is unemployed.
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A long and deep recession in the business cycle is
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a depression
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Industrial production is not a coincident indicator
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false
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Economic indicators like unemployment claims the average workweek, which change before real GDP changes are called
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leading
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A business cycle is the period of time in which
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there are four phases peak, recession trough and recovery
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Business cycles are recurring periods of economic growth and decline in an economy’s real GDP
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true
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If real GDP declines for at least one half year the economy is experiencing a
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recession
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The point at which real output reaches a maximum during a business cycle is called
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the peak
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The civilian labor force consists of
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the employed plus the unemployed who are not in the military
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A person who has given up searching for work is called
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a discouraged worker
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The unemployment rate is the percentage of the
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civilian labor force that is unemployed
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A principal cause of the business cycle is the changes in total spending that occur in the overall economy
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true
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The unemployment rate is the percentage of the civilian labor force that is unemployed but actively seeking work
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true
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when the rate of cyclical unemployment is zero the
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economy is considered to be at full employment
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People who are not currently employed but say they want a job are counted as unemployed only if they
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are actively seeking employment
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The economy’s natural rate of unemployment consists of
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structural plus frictional unemployment
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Lagging indicators
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-outstanding commercial loans -duration of unemployment -prime rate
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Full employment, which is always expected to occur consists of the frictionally and cyclically unemployed
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false
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When actual GDP equals potential GDP the actual employment rate will equal the economy’s natural rate of unemployment
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true
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Not a member of the labor force
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a full time student who devotes all her time to her classes
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The period during which real output falls during a business cycle is a
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recession
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People who are not currently employed but say they want a job, are counted as unemployed only if they
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are actively seeking employment
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Economists usually use the term “recession” to refer to
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two or more consecutive quarters of declining real GDP
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Bob is unemployed because his skills have become obsolete due to technological advances. This is
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structural unemployment
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A phrase in the business cycle in which the economy’s real GDP declines
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recession
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Full employment means which of the following is zero
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cyclical unemployment
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Fictional unemployment refers
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short periods of unemployment needed to match jobs and job seekers
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Variables that change before real GDP changes are measured by the
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index leading indicators
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The duration of unemployment is not a leading indicator
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true
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the natural rate of unemployment exists when cyclical unemployment equals zero
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false
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Cyclical unemployment is caused by
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declines in actual output below its full employment level
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The gov’t chief forecasting gauge for business cycles in the
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index of leading indicators
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Whom does the Bureau of Labor Statistics include in the discouraged worker group?
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members of the noninstitutional population who say they want to be employed but aren’t searching for a job.
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Workers who may be between jobs are considered
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frictionally unemployed
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cyclical unemployment is primarily caused by
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fluctuations in aggregate demand
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Someone classified as unemployed would say
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I’m not working, I had three interviews this week, and I’m trying to find a job
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Economy made up of 100 people, 60 hold jobs, 10 are looking for work, 15 are retired. How many will the civilian force is
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70