Question

11. Richard loses his job at the railroad due to a downturn in general business conditions. He is experiencing

a.	structural unemployment.
b.	cyclical unemployment.
c.	seasonal unemployment.
d.	frictional unemployment.

12.   The reduction of structural unemployment in the United States' economy may require

a.	an increase in the minimum wage.
b.	a reduction in government spending.
c.	an decrease in interest rates.
d.	increased spending on worker retraining.

13.   Unemployment insurance has an important macroeconomic effect because it

a.	props up aggregate supply.
b.	props up aggregate demand.
c.	props up aggregate exports.
d.	helps balance the federal budget.

14.   The nominal interest rate is the sum of the

a.	real interest rate and the historic rate of inflation.
b.	real interest rate and the expected rate of inflation.
c.	historic rate of inflation and the expected rate of inflation.
d.	expected rate of inflation and the rate of price level increase.

15.   The growth rate of potential GDP depends on

a.	the rate of technical progress.
b.	the growth rate of the capital stock.
c.	the growth rate of the labor force.
d.	all of the above.

Answer 1

a) "B"

Unemployment due to a fall in the demand or recession is called cyclical demand.

b) "D"

An increased training will decrease the relevant skill and that will reduce the structural unemployment in the economy which occurs due to outdated skills

c) "B"

It props up the aggregate demand in the market.

d) "B"

it is a sum total of real interest rate and the inflation in the market.

e) "D"

All the given options are responsible for the growth of the potential GDP.