Business cycles, unemployment and inflation practice

A graph of the business cycle shows the

Level of real GDP on the vertical axis and time on the horizontal axis

The recession phase of the business cycle is characterized as a decline in a real output for at least ___ months

Six

Which agency determines when recessions begin and end?

The National Bureau of Economic Research

Someone needs to be working or actively searching for a job to

Be included in the labor force

The Bureau of Labor statistics estimates the size of the labor force each month by surveying approximately ____ households

60,000

Short-term fluctuations experienced in the economy due to changes in levels of economic activity describe the

Business cycle

What unemployment happens all the time as people decide to move to different places, learn new skills and mature in their careers?

Frictional

Considering the presidential elections since 1948, data showed that a strong economy seemed to help the

Incumbent party

If the unemployment rate in a country was ___ there would be no frictional unemployment and no structural unemployment

0 %

The unemployment rate provides information on the ___ of the labor force that is employed and unemployed

percentage

Job-retraining programs or financial assistance to attend college can help what unemployed acquire new skills?

Structurally

A fully employed economy is one that is operating at what economists call the ____ rate of unemployment

Natural

A sluggish economy will generate some ______ unemployment

Cyclical

Comparing the actual unemployment rate with the ______ rate of unemployment can help us gauge the current state of the economy relative to normal times

Natural

A country with more generous labor policies, such as extended or large unemployment benefits, tend to

experience a higher natural rate of unemployment

An economy operating at ____ employment does not employ 100 % of the workers in the labor force

Full

The natural rate of unemployment is equal to the sum of which unemployment rates?

Frictional and structural

Inflation is caused by increases in

aggregate demand

Inflation represents a ______ in someone’s ability to buy goods and services

Decrease

In general, an increase in the money supply causes

Inflation

The natural rate of unemployment changes over time because

Frictional unemployment structural unemployement and the labor force change on a continuous basis

The Consumer Price Index is constructed using the goods and services purchased by what?

The average household

The CPI represents more than __ categories of goods and services, each of which can be included in one of eight major groups

200

The U.S. Bureau of Labor Statistics provides additional price indexes across many different types of goods and services. Typically there is a

Large variation in the individual price indexes for these consumption categories

When comparing periods of time separated by decades or generations, income comparisons are

Not exact because of the different goods and services that can be purchased in different eras

The producer price index measures the ______ change in the selling prices recieved by the producers of goods and services

Average

Any salary that is rising slower than the rate of inflation is actually falling, in real terms. This statement refers to

The difference between real and nominal income

The actual number of dollars received in exchange for the different resources available in the economy is

Nominal income

If the CPI and the inflation rate calculated from it understate the inflation faced by retirees, then the purchasing power of retirees is

Falling over time and retirees are becoming worse off

In the United States, the ____ Price index and the _____ price index tend to move together and in the same direction

Consumer, GDP

What income is the number of dollars received for labor

Nominal

When you sell a stock, you must pay taxes on the gain in value. Why?

You must pay this tax based on the nominal change in value

The _____ price index does not include purchases of imported or used product, but the ______ price index does account for them

GDP, Consumer