Macro Economics Chapter 06 Quiz

Question 1

The point at which real output reaches a maximum during a business cycle is called the: 
A: peak.
B: recession.
C: recovery.
D: trough.

Answer 1

A

Question 2

The business cycle consists of four phases. At the top we have:
A:recovery, followed by peak, and then recession followed by a recession.
B: recovery, followed by a recession, and then peak followed by recession.
C: peak, then an upturn followed by a recession, and then recession.
D: Peak, recession, trough, and recovery
E: peak, then a recession followed by recession, and finally, recovery.

Answer 2

D

Question 3

The phase in the business cycle in which real GDP declines is called a: 
A: trendline.
B: peak.
C: recession.
D: recovery.
E: trough.

Answer 3

C

Question 4

Frank quit his job at a textile plant to return to school full time. Which of the following statements is true?
A: Frank is frictionally unemployed.
B: Frank is no longer in the labor force.
C: Frank is structurally unemployed.
D: Frank is cyclically unemployed

Answer 4

B

Question 5

Retired persons are officially classified as: 
A: unemployed.
B: self-employed.
C: underemployed.
D: not in the labor force

Answer 5

D

Question 6

One problem with the unemployment rate is that:
A:discouraged workers are included in the calculation.
B: the data includes part-time workers as fully employed.
C: underemployment is measured in the calculation.
D: all of the above are problems.

Answer 6

B

Question 7

Unemployment that is of a short duration to allow time to find a new job is: 
A: structural unemployment.
B: cyclical unemployment.
C: frictional unemployment.
D: durational unemployment.

Answer 7

C

Question 8

An example of structural unemployment is a (an):
A: textile worker who quits one job and waits for the new job to begin.
B: engineer permanently laid off due to advances in technology.
C: computer programmer who becomes rich and leaves the labor force.
D: All of the above.

Answer 8

B

Question 9

Cyclical unemployment:
A: causes unemployment statistics to be understated.
B: causes unemployment statistics to be overstated.
C: occurs because of recessions.
D: occurs because of technological innovations in production.
E: only occurs with a zero inflation rate.

Answer 9

C

Question 10

The natural rate of unemployment occurs if there is no: 
A: unemployment.
B: frictional unemployment.
C: structural unemployment.
D: cyclical unemployment.

Answer 10

D