revision questions chapter 21 pt1

Question 1

what has happened during the past 3 recessions in the united kingdom

Answer 1

aggregate hours have DECREASED and average hours per worker have DECREASED

Question 2

the bottom or low point of a recession just before an expansion begins is called…

Answer 2

the trough

Question 3

> Total population: 80 mill
current unemployment: 40 mill
not working and looking for work: 2 mill
want to work but no longer looking for work: 4 mill

what is the number of people officially unemployed?

Answer 3

2 million (not working and looking for work)

Question 4

the unemployment rate=

Answer 4

(number of people unemployed/workforce) × 100

Question 5

suppose Andy is laid off from the automobile plant because of slow automobile sales. Andy is looking for a new job. Andy is considered

Answer 5

a job loser

Question 6

someone who voluntarily left there job

Answer 6

a job leaver

Question 7

someone who is not currently looking for work because they believe there are no job opportunities available

Answer 7

a discouraged worker

Question 8

cyclical unemployment is the result of…

Answer 8

the business cycle

Question 9

fact

Answer 9

there have been MORE growth rate recessions in which real GDP decreased

Question 10

> total population: 246 mill
working-age population: 207
workforce: 139 mill
employed: 133 mill
unemployed: 6 mill

what is the employment rate?

Answer 10

workforce / working age population x100
139 / 207 x100 = 64%

Question 11

When the economy switches production toward services and away from manufacturing and workers in the manufacturing industry are permanently made redundant,

Answer 11

structural unemployment increases

Question 12

structural unemployment

Answer 12

type of unemployment that occurs due to a mismatch between the skills of workers and the available jobs

Question 13

cyclical unemployment

Answer 13

a type of unemployment that occurs due to changes in the business cycle

Question 14

frictional unemployment

Answer 14

type of unemployment that occurs when people are in-between jobs

Question 15

In 2004 the Retail Prices Index was equal to 157.5 and in 2005 it was equal to 163.8. What is the inflation rate over this time period?

Answer 15

the inflation rate over a specific time period= difference between the RPI of both years divided by RPI of earlier year x100

163.8-157.5= 6.3/157.5 x100=

4.0%