UNEMPLOYMENT 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. 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.
5. Data on unemployment is reported a. weekly. b. monthly. c. quarterly. d. yearly. 6. 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. 7. The labor force equals the a. number of people who are employed. b.
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