midterm 2 - Name: _ Class: _ Date: _ ID: A Econ 002 Winter...

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Name: ________________________ Class: ___________________ Date: __________ ID: A 1 Econ 002 Winter 2007 Midterm 2 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ____ 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 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. changes in the minimum wage. ____ 3. The labor force equals the a. number of people who are employed. b. number of people who are unemployed. c. number of people employed plus the number of people unemployed. d. adult population. ____ 4. Anna has just finished high school and started looking for her first job, but has not yet found one. As a result, the unemployment rate a. increases, and the labor-force participation rate is unaffected. b. increases, and the labor-force participation rate increases. c. is unaffected, and the labor-force participation rate increases. d. increases, and the labor-force participation rate decreases. ____ 5. Which of the following is a cause of frictional unemployment? a. the minimum wage b. a worker leaving a job to find one with better benefits c. labor unions d. All of the above are correct. ____ 6. Other things the same, an increase in wages above their equilibrium level a. increases frictional unemployment but leaves the natural rate of unemployment unchanged. b. increases frictional unemployment and increases the natural rate of unemployment. c. increases structural unemployment but leaves the natural rate of unemployment unchanged. d. increases structural unemployment and increases the natural rate of unemployment. ____ 7. Money a. is more efficient than barter. b. makes trades easier. c. allows greater specialization. d. All of the above are correct. ____ 8. An item that people can use to transfer purchasing power from the present to the future is called a. a medium of exchange. b. a unit of account. c. a store of value. d. None of the above is correct.
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Name: ________________________ ID: A 2 ____ 9. Current U.S. currency is a. fiat money with intrinsic value. b. fiat money with no intrinsic value. c.
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This note was uploaded on 04/10/2008 for the course ECON 002 taught by Professor Mahalingam during the Spring '07 term at UC Riverside.

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midterm 2 - Name: _ Class: _ Date: _ ID: A Econ 002 Winter...

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