Foundations of Economics (8th Edition)
8th Edition
ISBN: 9780134486819
Author: Robin Bade, Michael Parkin
Publisher: PEARSON
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Chapter 22, Problem 7MCQ
To determine
The relationship between the output gap, the real
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Where on the Business Cycle are we most likely to find the highest unemployment?
A) Expansion
B) Trough
C) Peak
D) Contraction (Recession)
When the unemployment rate
A. is greater than; equals
OB. is less than; is less than
OC. is less than; is greater than
OD. is greater than; is greater than
the natural unemployment rate, real GDP
potential GDP.
An economy is said to achieve “full employment” when:
a. The unemployment rate is equal to zero.
b. The unemployment is equal to the cyclical plus frictional unemployment.
c. The unemployment is equal to the frictional plus structural unemployment.
d. The unemployment is equal to the cyclical plus structural unemployment.
Chapter 22 Solutions
Foundations of Economics (8th Edition)
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- If the number of people in the labor force is 170 million and 155 million people are employed, then the unemployment rate is __________ percent.arrow_forwardimportance of employment and unemployment? explain both terms.arrow_forwardWhich condition does the term full employment refer to? Select one: a. There is only cyclical unemployment. b. There is no cyclical unemployment. c. Firms have all the workers they need. d. There is no frictional unemployment. e. Everyone able-bodied person is employedarrow_forward
- 1) As the unemployment rate rises: A) the separation rate decreases. B) the young and unskilled experience lower-than-average increases in unemployment. C) the young and skilled experience larger-than-average increases in unemployment. D) the young and unskilled experience larger-than-average increases in unemployment. E) the proportion of the unemployed finding a job increases.arrow_forwardUnemployment that occurs during the normal workings of an economy as people change jobs and move across the country is called: cyclical unemployment O frictional unemployment natural unemployment structural unemploymentarrow_forward1) Suppose the job separation rate (s) of an economy is 0.01 and the job findings rate (f) is 0.2. The long run unemployment rate (u) is then 4.7%. Suppose the government is implementing a new law that helps unemployed people find jobs sooner. Which of the following is the most likely outcome? a) s increases and u decreases b) s decreases and u increases c) fincreases and u increases d) f increases and u decreasesarrow_forward
- Q)According to the data from the Bureau of Labor Statistics found here, Number of workers employed 8,400 Frictional unemployment 250 Structural unemployment 350 Cyclical unemployment 600 Discouraged workers 400 Adult population 12,000 A) The labour force a. 7,550. b. 8,000. c. 8,400. d. 9,600 B) the unemployment rate is a. 12.5 percent. b. 15 percent. c. 16 percent. d. 24 percent. C)the labor force participation rate is a. 12.5 percent. b. 25 percent. c. 60 percent. d. 80 percent.arrow_forwarda.) what does unemployment mean economically and explain the types of Unemployment? b.) Explain Zero Unemployment.arrow_forwardThe type of unemployment that is associated with labor market frictions or job search is referred to as: a. cyclical unemployment b. seasonal unemployment c. frictional unemployment d. structural unemploymentarrow_forward
- In the beginning of a recovery after a recession, employment begins to rise and the news media report these data on job growth. a) would such a report have an impact on the labor force ? b) how would it effect the unemployment rate?arrow_forwardThe table below shows unemployment and labor force statistics for an economy. Actual rate of unemployment 3% Natural rate of unemployment 4% Population of the country 125 million Number of people employed 97 million Number of people unemployed 3 million Number of people employed part time 5 million Number of discouraged workers 2 million (a) Calculate the size of the labor force. Show your work. (b) Calculate the labor force participation rate. Show your work. (c) Given the state of the economy described in the table, is actual real output less than, greater than, or equal to potential real output? Explain. (d) Calculate what the cyclical unemployment rate would be if the actual rate of unemployment increased to 5 percent. Show your work. (e) Suppose discouraged workers reenter the labor force and find employment. Will the actual rate of unemployment increase, decrease, or stay the same?arrow_forwardThe natural rate of unemployment O increases during recessions and depressions. equals the proportion of people in the labour force who are unemployed when the economy is operating at its potential level of GDP. is the portion of unemployment that is due to the normal working of the labour market, reflecting short-run job/skill matching problems. is the portion of unemployment that is due to changes in the structure of the economy, which results in some workers' skills becoming obsolete.arrow_forward
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