Question

1.    Recently, a flood of cheap computer chips has poured over the border from Arboc to Arbez.  Thousands of workers in the Arbezani computer chip industry have lost their jobs.  This unemployment is best described as
A.   frictional.
B.    structural
C.    competitive.
D.   cyclical.

2.    Barry Borrower arranges a loan with Leonard Lender.  Last year inflation was running at 3%.  Leonard charges Barry an interest rate of 9%, and would be adequately rewarded with a real interest rate of 4%.  Leonard must expect the inflation rate during the period of the loan to be
A.   6%.
B.    5%.
C.    2%.
D.   1%.

3.    The Arbezani aggregate price level rose at 10% last year. This year, the aggregate price level rises at 2%.  An economist would refer to the behavior of this year’s aggregate price level as
A.   stagflationary.
B.    inflationary.
C.    deflationary.
D.   exflationary.

4.    Large numbers of illegal (unrecorded) migrant workers from Arboc enter Arbez.  Because they will work for low wages, the Arbocalis take jobs from Arbezani workers. The official unemployment rate in Arbez will
A.   increase because the number of Arbezani workers who are jobless has increased.
B.    not change because the same number of jobs are being filled.
C.    decrease because the number in the labor force has increased.
D.   decrease because there is an increase in the number of discouraged workers.

5.    Cost-push inflation occurs when the aggregate __________ curve shifts _______.
A.   demand, right
B.    demand, left
C.    supply, right
D.   supply, left

6.    A dental school graduate, Phil McCafferty, is looking for a place to set up practice.  He is ____________ unemployed.
A.   frictionally
B.    structurally
C.    cyclically
D.   residually

7.    There is a general increase in the prices of Arbezani goods.  This will most likely ___________ Arbezani exports and _____________ Arbezani imports.
A.   increase, increase
B.    increase, decrease
C.    decrease, increase
D.   decrease, decrease

8.    The unemployment rate that occurs as a normal consequence of the efficient functioning of the economy is the
A.   frictional rate of unemployment.
B.    structural rate of unemployment.
C.    cyclical rate of unemployment.
D.   natural rate of unemployment.

9.    Unemployment caused by short-run delays in matching acquired skills with available jobs is
A.   frictional unemployment.
B.    structural unemployment.
C.    cyclical unemployment.
D.   natural unemployment.

10.   The unemployment rate will fall if
A.   there is a recession.
B.    there is a decrease in the population.
C.    the number in the labor force decreases.
D.   there is an increase in the number of discouraged workers.

Answer 1

1. Option B. Structural

Explanation: Structural unemployment takes place because of industrial reorganization for various factors such as a change in technology, change in industry structure, etc. In the case of structural unemployment, the workers do not have the required skills or efficiency for the available jobs. Here, thousands of workers in the Arbezani computer chip industry are no more as efficient as demanded by the industry because of industry reorganization for cheap imports.