ECO/372 - Business Cycles, Unemployment, and Inflation Exam 2023 Graded A+
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ECO/372
ECO/372 - Business Cycles, Unemployment, and Inflation Exam 2023 Graded A+
Which of the following is not part of the business cycle?
Depression
At what minimum age are you considered to be in the labor force?
16
unemployement rate
unemployed/labor force (unemployed + employed) *100
Which t...
and inflation exam 2023 graded a which of the following is not part of the business cycle depression at what minimum age are you considered to be in the lab
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ECO/372 - Business Cycles, Unemployment, and Inflation
Exam 2023 Graded A+
Which of the following is not part of the business cycle?
Depression
At what minimum age are you considered to be in the labor force?
16
unemployement rate
unemployed/labor force (unemployed + employed) *100
Which type(s) of unemployment exist when the economy is at full employment?
both frictional and structural unemployment
The labor force is important, because it is the basis for calculating the:
unemployment rate.
Inflation represents a(n) (increase/decrease) in someone's ability to buy goods
and services.
decrease.
Why is an unemployment rate of 0% not considered desirable?
-Some frictional unemployment is healthy as people move to new, better jobs.
-Some structural unemployment indicates innovation and growth.
Jim is without a job but is available to work and has actively looked for
employment in the past four weeks.
Jim is <unemployed>
A medical doctor is working as a waiter.
The doctor is <employed>
Now that the children are out of the house, a homemaker has been looking for
part-time work for four weeks.
The homemaker is <unemployed>
Due to some illness, Sally is not able to lok for jobs.
Sally is <not in the labor force>
Stan is a student who will apply for a summer job but is currently in school.
Stan is <not is the labor force>
Between 1960 and 2000, the labor force participation rate increased because:
- women increasingly entered the labor force
- baby boomers had come of working age and entered the labor force
A decrease in the _____ rate is a good indicator for an economy if the size of the
labor force stays constant.
unemployment
Unemployment that results from workers searching and waiting for a job is:
frictional unemployment
Frictional unemployment results from workers searching and waiting for jobs.
Natural rate of unemployment
((FU + SU) ÷ LF) * 100
NRU is 12.5% if actual rte of unemployment is also 12.5%, we can conclude that there
is no cyclical unemployment in the economy. Since Caladan is operating at the NRU,
, the economy is operating at full employment
If AUR in Caladan is 18.5%. at 18.5% the actual unemployment rate exceeds its natural
rate of 12.5%, indiciating the presence of cylical unemployment. Since the NRU equals
the sum of the FU and SU rates, the difference between the actual rte and the NRU is
equal to the cyclical unemployment rate.
Cyclical unemployment rate is equal to 18.5% - 12.5% = 6%. A recession must have
cause the unemployment rate to soar to 18.5%. The economy is not operating at full
employment, the labor market is weak, and output if failing
Total unemployment
U ÷ LF
Short-term fluctuations experienced in the economy due to changes in levels of
economic activity:
can vary in duration and severity
The CPI is computed by the:
U.S. Bureau of Labor Statistics.
The CPI is calculated ______
monthly by the Bureau of Labor Statistics
The three types, or classifications, of unemployment are:
structural, cyclical and frictional
The value of the market basket is the number of units purchased times the price
summed.
CPI in year 2 - CPI in year 1 / CPI in year 1 x 100
CPI year1 =
(value of a market basket in year 1/value of same market basket in base year) x 100
CPI year2 =
(value of a market basket in year 2/value of same market basket in base year) x 100
CPI year3 =
(value of a market basket in year 3/value of same market basket in base year) x 100
natural rate of unemployment
equals the sum of the frictional and structural unemployment rates
The consumer price index (CPI) measures
the average price of a market basket of goods
The causes of inflation are usually related to:
changes in the money supply and economy wide changes in demand or supply for
goods and services
during a recession, some people trying to find work might become _______ and
give up looking for a position thereby leaving the labor force
discouraged
Their departure actually makes the unemployment rate go down, all else held constant,
even though the labor market is worsening.
When more unemployed individuals find jobs, the ____ rate decreases, and the
labor market improves
unemployment
The Consumer Price Index (CPI) is computed as:
(value of the market basket in year t/value of the market basket in the base year) x 100
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