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Chapter 28
Unemployment
TRUE/FALSE
1. Most people rely on income other than their labor earnings to maintain their standard of living.
ANS: F DIF: 1 REF: 28-0
NAT: Analytic LOC: The study of economics and definitions of economics
TOP: Income | Standard of living MSC: Definitional
2. The amount of unemployment that a country typically experiences is a determinant of that countrys standard of living.
ANS: T DIF: 1 REF: 28-0
NAT: Analytic LOC: Unemployment and inflation
TOP: Unemployment | Standard of living MSC: Definitional
3. Some degree of unemployment is inevitable in a complex economy.
ANS: T DIF: 1 REF: 28-0
NAT: Analytic LOC: Unemployment and inflation TOP: Unemployment
MSC: Definitional
4. The amount of unemployment varies little over time and across countries.
ANS: F DIF: 1 REF: 28-0
NAT: Analytic LOC: Unemployment and inflation TOP: Unemployment
MSC: Definitional
5. When a country keeps its workers as fully employed as possible, it achieves a higher level of GDP than it would if it left many of its workers standing idle.
ANS: T DIF: 1 REF: 28-0
NAT: Analytic LOC: The study of economics and definitions of economics
TOP: Employment | GDP MSC: Definitional
6. An economy’s natural rate of unemployment refers to the amount of unemployment that the economy normally experiences.
ANS: T DIF: 1 REF: 28-0
NAT: Analytic LOC: Unemployment and inflation
TOP: Natural rate of unemployment MSC: Definitional
7. Cyclical unemployment refers to the year-to-year fluctuations in unemployment around its natural rate.
ANS: T DIF: 1 REF: 28-0
NAT: Analytic LOC: Unemployment and inflation TOP: Cyclical unemployment
MSC: Definitional
8. The natural rate of unemployment is closely associated with the short-run ups and downs of economic activity.
ANS: F DIF: 1 REF: 28-0
NAT: Analytic LOC: Unemployment and inflation
TOP: Natural rate of unemployment MSC: Definitional
9. The natural rate of unemployment is the desirable rate of unemployment for an economy.
ANS: F DIF: 1 REF: 28-0
N
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