Exhibit 12-2 Unemployment categories
Category# ofIndividuals
Frictional unemployment 20
Structural unemployment 35
Cyclical unemployment 60
Discouraged workers 5
Underemployed workers 10
Fully employed workers410
Population900
The unemployment rate for the economy in Exhibit 12-2 is:
A. 12.8 percent.
B. 21.5 percent.
C. 22.2 percent.
D. 30.5 percent.
Answer: B
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Refer to Figure 11.4. Which diagram illustrates the effect of a decrease in the marginal propensity to consume?
A) A B) B C) C D) D
In the short-run
A) the aggregate supply curve is upward sloping. B) real GDP is always equal to potential GDP. C) the money wage rate can change. D) the price level does not change.
The reduction in transactions costs brought about by financial intermediaries benefits
A) small savers, but not small borrowers. B) small borrowers, but not small savers. C) both small savers and small borrowers. D) society through greater economic efficiency; small savers and borrowers do not gain directly.
Robert Solow is one of the developers of
a. classical economics. b. the neoclassical growth model. c. real business cycle theory. d. new classical economics.