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Natural Unemployment, Labor Force, Principles of Macroeconomics Final Exam

The key terms in this Principles of Macroeconomics course include Natural Unemployment, Sum of Structural and Frictional Unemployment, Labor Force, Unemployment Rate, Growing Economy, Natural Rate of Unemployment, Demand, Principles of Macroeconomics Final Exam


Natural unemployment is the

sum of frictional and cyclical unemployment.

average of frictional, structural, and cyclical unemployment.

sum of frictional, structural, and cyclical unemployment.

sum of structural and frictional unemployment.

sum of structural and cyclical unemployment.


Unemployment caused by delays in matching available jobs and workers is called ________ unemployment.

frictional

discouraged

cyclical

seasonal

structural


Which of the following equations represents the labor force?

(number of unemployed / labor force) × 100

(number of employed / labor force) × 100

(labor force / relevant population) × 100

(number of unemployed / relevant population) × 100

(unemployed + employed)


What are the two types of unemployment that are consistent with a dynamic, growing economy?

frictional and structural

real and nominal

frictional and cyclical

natural and cyclical

cyclical and structural


Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment?

Demand for products is so high that firms keep their factories open for additional hours of production and pay their workers overtime.

Demand for products starts to decrease, so firms keep their factories open for additional hours of production to make up the difference.

Demand for products is so high that firms raise their prices to take advantage of extra profits.

The government decreases unemployment benefits.

The economy enters a recession, so firms start to produce more to help boost the economy.


From an economist’s perspective, which of the following would not be considered as investment spending?

additions to inventories at steel plant

building a new factory

purchase of shares in Wal Mart

the building of an apartment complex

Explanation:

When most people hear the word investment, they think of savings, stocks, or bonds. But in macroeconomics investment refers to private spending on tools, plant and equipment used to produce future output. It also includes the building of a new home. Investment also includes purchases by businesses that add to their own inventories, and also counts products that are produced but not sold in the specific year.