Inflation/Unemployment

. Cyclical unemployment is defined as:

• The amount of workers who have given up looking for work but would still take a job if it paid enough.
• The natural rate of unemployment.
• Unemployment correlated with business fluctuations.
• Short-term unemployment caused by the difficulty of matching employees to open positions.
• Persistent, long-term unemployment caused by long-lasting shocks to the economy.

Which of the following contribute to why wages are considered sticky?

• People get upset when wages fall, particularly if they think their employer is causing the wage cut, which negatively impacts workplace morale.
• If wages were easily cut, workers might respond by working less or disrupting their work, thus negatively affecting productivity.
• Minimum wage requirements make it difficult to lower wages quickly or often.
• All of the above.

The natural rate of unemployment is defined as:

• Frictional plus structural unemployment.
• Cyclical plus frictional unemployment.
• Cyclical unemployment.
• The rate at which workers retire from the labor force.
• Structural unemployment plus the rate at which domestic jobs are replaced by outsourcing skills internationally.

Under some conditions, the government can reduce cyclical unemployment using __________ and __________ policies.

• humanitarian & tax
• monetary & fiscal
• domestic & foreign
• industrial & anti-trust

GDP adjusted for inflation

• Real GDP
• Nominal GDP

GDP not adjusted for inflation

• Real GDP
• Nominal GDP