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Mid2 Review Summer08
1. If the number of employed workers equals 200 million and the number of unemployed
workers equals 20 million, the unemployment rate equals _____ percent (rounded to the
nearest percent).
A)
0
B)
9
C)
10
D)
20
2. If the fraction of employed workers who lose their jobs each month (the rate of job
separation) is 0.01 and the fraction of the unemployed who find a job each month is 0.09
(the rate of job findings), then the natural rate of unemployment is:
A)
1 percent.
B)
9 percent.
C)
10 percent.
D)
about 11 percent.
3. If the steadystate rate of unemployment equals 0.125 and the fraction of unemployed
workers who find jobs each month
(the rate of job findings) is 0.56, then the fraction of
employed workers who lose their jobs each month (the rate of job separations) must be:
A)
0.08.
B)
0.125.
C)
0.22.
D)
0.435.
Use the following to answer questions 45:
Exhibit: Shift in Aggregate Demand
Page 1
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with price
P
0
and output
Y
. Aggregate demand is given by curve
AD
0
, and
SRAS
and
LRAS
represent, respectively, shortrun and longrun aggregate supply. Now assume
that the aggregate demand curve shifts so that it is represented by
AD
1
. The economy
moves first to point ______ and then, in the long run, to point ______.
A)
A; D
B)
D; A
C)
C; B
D)
B; C
5. (Exhibit: Shift in Aggregate Demand) Assume that the economy is initially at point A
with aggregate demand given by
AD
2
.
A shift in the aggregate demand curve to
AD
0
could be the result of either a(n) ______ in the money supply or a(n) ______ in velocity.
A)
increase; increase
B)
increase; decrease
C)
decrease; increase
D)
decrease; decrease
Use the following to answer questions 67:
Exhibit: Supply Shock
6. (Exhibit: Supply Shock) In this graph, assume that the economy starts at point A and
there is a favorable supply shock that does not last forever. In this situation, point
______ represents shortrun equilibrium and point ______ represents longrun
equilibrium.
A)
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This note was uploaded on 12/06/2009 for the course ECO Macro123 taught by Professor Yung during the Spring '09 term at CulverStockton.
 Spring '09
 Yung
 Unemployment

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