EOC Answers Ch21 - Copy (2) - Chapter 21: Introduction to...

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Chapter 21: Introduction to Macroeconomics: Unemployment, Inflation, and Economic Fluctuations True or False 1. Economic growth means a growth in real, per capita total output over time. T 2. Individuals, because they may differ considerably in their evaluation of the relative importance of certain issues, may disagree about whether certain so-called problems are really problems after all. T 3. Economic growth is considered to be positive by all individuals. F 4. Other things being equal, relatively high rates of unemployment are almost universally viewed as bad. T 5. The unemployment rate is the number of people officially unemployed divided by a country’s population aged 16 or over. F 6. The civilian labor force figure excludes those in the armed services, prison, and mental hospitals, as well homemakers, retirees, and full-time students because they are not considered currently available for employment. T 7. By far, the worst employment downturn in U.S. history was the Great Depression. T 8. Before 1960, variations in unemployment tended to be more pronounced than since 1960. T 9. Discouraged workers, who have not actively sought work for four weeks, are counted as unemployed. F 10. People looking for full-time work who grudgingly settle for a part-time job are counted as employed, even though they are only “partly” employed. T 11. Some people working in the underground economy may be counted in labor statistics as unemployed, while others may be counted as not in the labor force. T 12. Unemployment rates are usually similar across different segments of the population, but they vary substantially over time. F 13. In the short run, a reduction in unemployment may come at the expense of a higher rate of inflation. T 14. The duration of unemployment tends to be greater when the amount of unemployment is low and smaller when the amount of unemployment is high. F 15. Unemployment means a loss of potential output. T 16. When the baby-boom generation began entering the labor force, it raised the labor force participation rate. T 17. Frictional unemployment results from persons being temporarily between jobs. T 18. Frictional unemployment, while not good in itself, is a by-product of a healthy phenomenon; and because it is short lived, it is not generally viewed as a serious problem. T 19. Structural employment can arise because jobs that require particular skills disappear. T 20. Structural unemployment is easily measured and stable over time. F 21. Cyclical unemployment may result from an insufficient level of demand for goods and services. T 22. Given the volatility and dimensions of unemployment, governments view it as the result of inadequate demand, which is especially correctable through government policies. T 23. The natural rate of unemployment roughly equals the sum of frictional and cyclical unemployment when they are at a maximum. F 24. When unemployment rises above the natural rate, it reflects the existence of cyclical unemployment. T
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EOC Answers Ch21 - Copy (2) - Chapter 21: Introduction to...

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