21. Cyclical unemployment is a result of a. An inadequate matching of qualified

Question

21. Cyclical unemployment is a result of a. An inadequate matching of qualified workers and available jobs b. Inaccurate and/or costly information about job opportunities c. Insufficient employment in the building trades d. Not enough employees to fill available jobs e. A downturn in economic activity 22. When people are unemployed because their skills have become obsolete due to technological advances, this type of unemployment is called a. Frictional b. structural c. cyclical d. voluntary e. abnormal 23. The natural unemployment is the unemployment rate that results from a. Rapid changes in the business cycle b. Frictional and structural conditions in labor markets c. Welfare benefits to unemployed workers d. Inflexible wages in the marketplace 24. Full employment is that rate of employment when All labor resources of an economy are employed somewhere There is efficient use of the labor force, with allowance made for normal unemployment due to dynamic changes and the structural conditions in the economy Cyclical unemployment is between 4 percent and 5 percent of the labor force Everybody who wants a job can find one a. b. c. d. 25. In the United States, an employment of between 94 percent and 95 percent indicates that the a. b. c. d. The economy has inefficiently high unemployment Economy is at full employment Government has not done enough to provide jobs Economy is in a recession

Explanation / Answer

21) Option E

Cyclical unemployment is yet another kind of unemployment whereby workers become unemployed due to upswings and downswings in the cycle of the business. Cyclical component of unemployment shines more in the periods of recession

22) Option B

It is structural unemployment which results when workers experience a job loss only because their skills are no more in demand.

23) Option B

There is a certain rate of unemployment even when the economy has full employment. This unemployment rate is called the natural rate of unemployment. Frictional and structural unemployment compose the natural rate of unemployment and their presence necessitates the unemployment to prevail all the time

24) Option B

As mentioned, Even though the labor market has no worker unemployed and the labor demanded equals labor supplied, there is always some unemployment in the economy. There is a certain rate of unemployment even when the economy has full employment. This unemployment rate is called the natural rate of unemployment.

25) Option B

Natural rate of unemployment has often been considered equal to 5%

12) Option B

Inflation = (222 - 200)*100/200 = 11%

13) Option B

Cost of living is important measure for inflation borne by the urban consumer

14) Option A

Nominal GDP/real GDP = deflator. If nominal GDP > real GDP, Deflator will increase faster

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