# Econ 110 Exam #3 Quizzes

Which of the following statements is true?

A.) Cyclical unemployment is the unemployment that occurs as an economy goes through contractionary periods of the business cycle.

B.) Frictional unemployment occurs when people switch jobs or when firms go out of business, causing people to be unemployed for a short duration.

C.) Structural unemployment refers to people being unemployed because they don't possess the skills firms are looking for.

D.) The natural rate of unemployment includes frictional unemployment and a small component of cyclical unemployment.

E.) All of the above statements are true.
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Which of the following statements is true?

A.) Cyclical unemployment is the unemployment that occurs as an economy goes through contractionary periods of the business cycle.

B.) Frictional unemployment occurs when people switch jobs or when firms go out of business, causing people to be unemployed for a short duration.

C.) Structural unemployment refers to people being unemployed because they don't possess the skills firms are looking for.

D.) The natural rate of unemployment includes frictional unemployment and a small component of cyclical unemployment.

E.) All of the above statements are true.
Which of the following is the best way to describe the labor force participation rate in the United States?

A.) The labor force participation rate is the percent of all people in the labor force who are employed.

B.) The labor force participation rate is the percent of all people who are aged 16 or older.

C.) The labor force participation rate is the percent of all people aged 16 and older who are in the labor market by either being employed or unemployed.

D.) The labor force participation rate is the percent of all people aged 16 or older who are employed.

E.) The labor force participation rate is the percent of all people aged 16 and older who are employed or in school.
Which of the following statements about unemployment is NOT true?

A.) Most people who become unemployed find a new job within 6 months.

B.) Discouraged workers are people who don't have a job and would like a job but have stopped searching for a job because they think a search would be futile.

C.) To be unemployed, one must be without a job but also actively looking for a job.

D.) The unemployment rate in the United States has been in the range of 4% to 6% for much of the last 40 years.

E.) Trends in the unemployment rate depend on how one calculates the unemployment rate (e.g., U-1 vs. U-3 vs. U-6).
Which of the following is true regarding typical job flows in the U.S. labor market?

A.) Between 250,000 and 450,000 people start a new job in a typical month of an expansion.

B.) It typically takes 5 to 10 years for all of the jobs lost in a recession to be regained.

C.) Between 4 million and 6 million people start a new job in a typical month.

D.) Over the last 50 years, the labor force participation rate of mem has held constant while the labor force participation rate of women has steadily increased.

E.) In the first two months of Covid (March and April of 2020), about 28 million Americans lost their job. As a result, the unemployment rate increased to about 25%, and stayed there for over 6 months.
Which of the following is NOT a problem with the idea of the government calculating a price level for the economy?

A.) Prices are not constant across geographical locations.

B.) Households can adjust their purchasing patterns over time to minimize the effect of facing higher prices on some goods.

C.) It is difficult to account for changes in the quality of a product over time.

D.) Difference households desire different baskets of goods.

E.) All of the above are potential problems when calculating a price level.
When calculating real values, dollar amounts are converted to a base year unit of measure. Typically, the price level (i.e., the cost of the basket of goods) is assumed to equal 100 in the base year. As such, which of the following statements is true?

A.) Any year for which the price index exceeds 100 is associated with lower prices compared to the base year.

B.) Any year for which the price index exceeds 100 is associated with higher prices compared to the base year.

C.) The base year must be the first year of data (i.e., the oldest year of data).

D.) Any year for which the price index is below 100 is associated with higher prices compared to the base year.

E.) The base year must be the most recent year of data.