1. there is only cyclical unemployment in the economy. B. there is no cyclical u
ID: 1227841 • Letter: 1
Question
1.
there is only cyclical unemployment in the economy.
B.
there is no cyclical unemployment in the economy.
C.
the unemployment rate is 0%.
D.
there is only structural unemployment in the economy.
2. With the exception of during recessions, workers in Canada are eligible for unemployment benefits for about twice as long a period of time as workers in the United States. As a result,
A.
frictional unemployment is higher, on average, in the United States than in Canada.
B.
the average duration of unemployment is longer in the United States than in Canada.
C.
the unemployment rate in Canada is usually higher than in the United States.
D.
the opportunity cost of job search in Canada is lower than in the United States
3.
Year
Real GDP
(Billion of 2000 dollars)
2010
$8,700
2011
$8,875
2012
$9,000
2013
$9,280
Using the table above, what is the approximate growth rate of real GDP from 2012 to 2013?
A.
4%
B.
3%
C.
1%
D.
2%
4. If aggregate demand just increased, which of the following may have caused the increase?
A.
an increase in the price level
B.
an increase in government purchases
C.
an increase in the interest rate
D.
an increase in imports
Year
Real GDP
(Billion of 2000 dollars)
2010
$8,700
2011
$8,875
2012
$9,000
2013
$9,280
Explanation / Answer
(1) Data is missing.
(2) (A)
Since duration of unemployment insurance is higher, workers get more time to look for a job, and frictional unemployment increases.
(3) (B)
Growth in real GDP = ($9,280 billion / $9,000 billion) - 1 = 1.03 - 1 = 0.03 = 3%
(4) (B)
Higher government spending raises aggregate demand.
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