Chapter 28 (A)

1. The natural rate of unemployment is the

• A.unemployment rate that would prevail with zero inflation.
• B.rate associated with the highest possible level of GDP.
• C. difference between the long-run and short-run unemployment rates.
• D.amount of unemployment that the economy normally experiences.

2. Cyclical unemployment refers to

• A.the relation between the probability of unemployment and a worker’s changing level of experience.
• B.how often a worker is likely to be employed during her lifetime
• C. year-to-year fluctuations of unemployment around its natural rate.
• D.long-term trends in unemployment.

3. Cyclical unemployment is closely associated with

• A.long-term economic growth.
• B.short-run ups and downs of the economy.
• C. fluctuations in the natural rate of unemployment.
• D.seasonal fluctuations in spending.

4. The natural rate of unemployment

• A.is a constant.
• B.is the desirable rate of unemployment.
• C. cannot be altered by economic policy.
• D.None of the above are correct.

5. Which of the following is correct?

• A.Some degree of unemployment is inevitable.
• B.Other things the same an increase in the number of people who are unemployed decreases real GDP.
• C. Cyclical unemployment is inversely related to short-run economic fluctuations.
• D.All of the above are correct.

6. Data on unemployment is reported

• A.weekly.
• B.monthly.
• C. quarterly.
• D.yearly.

7. The BLS produces data on

• A.unemployment.
• B.types of employment.
• C. length of the average workweek.
• D.All of the above are correct.

8. Which of the following is incorrect?

• A.The unemployment rate is computed using the number of unemployment insurance claims filed.
• B.Each adult included in the unemployment statistics is classified as employed, unemployed, or not in the labor force.
• C. Unemployment numbers include people aged sixteen and older.
• D.The Bureau of Labor Statistics gathers data on unemployment and employment.

9. Unemployment data is collected

• A.from unemployment insurance claims.
• B.through a regular survey of about 60,000 households.
• C. through a regular survey of about 200,000 firms.
• D.Unemployment data is collected using all of the above.

10. Which list includes all the categories into which the BLS divides the adult population?

• A.employed or unemployed
• B.discouraged workers, employed, or unemployed
• C. employed, unemployed, or not in the labor force
• D.discouraged workers, employed, or not in the labor force