ECON 400 MIDTERM QUESTIONS & ANSWERS
Suppose during the third week in April 2015 there is a natural disaster that causes
3,000,000 workers in the United States suddenly and unexpectedly to lose their jobs.
How would this affect the unemployment rate for April 2015? - Answers - Have no effect
What is the definition of a person marginally attached to the labor force? - Answers -
Someone has not looked for a job within the past 4 weeks, but states that he wants to
work and has looked for a job during the past 12 months.
What is the name of the survey that collects the data used to calculate the
unemployment rate? - Answers - Current Population Survey
When the data is gathered to calculate the unemployment rate, how many households
are surveyed? - Answers - 60,000
Which of the following statements about the mean duration of unemployment is true? -
Answers - The mean duration of unemployment in late 2011 was about 40 weeks.
What is the definition of U6? - Answers - It is the unemployment rate obtained by adding
to the number of unemployed those people who are marginally attached to the labor
force including discouraged workers plus all workers who are classified as working part-
time for economic reasons.
When the data is gathered to calculate the unemployment rate for the month of August,
what share of households surveyed in August would have also been surveyed in July? -
Answers - 75%
What is the definition of U5? - Answers - It is the unemployment rate obtained by adding
to the number of unemployed those people who are marginally attached to the labor
force including discouraged workers.
When the data is gathered to calculate the unemployment rate, how long is a household
in the survey? - Answers - Four months in a row, then is out of the sample for 8 months,
and then it is in the sample the same four months the next year, then it is dropped from
the sample.
Prior to the 2008-2009 recession, the median duration of unemployment - Answers -
was typically, but not always, below 10 weeks
Which of the following criteria is concerned with whether output has declined enough for
a recession to have occurred? - Answers - Amplitude
A business cycle trough is best defined as - Answers - the point in time when a recovery
begins.
, According to the business-cycle approach to analyzing business cycles - Answers - the
economy can be in one of two states: an expansion or a recession.
We use the term business cycle - Answers - to emphasize that recessions and
recoveries are inevitable even though they do not represent cycles in a mathematical
sense.
During the 4th quarter of 2008 and the 1st quarter of 2009 real GDP declined by a rate
of over 6% per year. Which component of GDP was most responsible for these
declines? - Answers - gross private domestic investment expenditures
Which of the following is the best definition of GDP for the United States? - Answers -
The total market value of all final goods and services produced in the United States
during one year.
Suppose that the advanced estimate of real GDP for the 4th quarter suggests that GDP
during the 4th quarter grew faster than GDP during the 3rd quarter. On average, how
often will it turn out that according to the final revision of the data that real GDP during
the 4th quarter will still appear to have grown faster than it did during the 3rd quarter? -
Answers - 75%
Which of the following is not a way of measuring GDP? - Answers - The accrual method
or approach
Who determines the official turning points of business cycles? - Answers - The National
Bureau of Economic Research
What component of GDP automatically corrects for the problem of "where value is
produced?" - Answers - Net exports
During lecture 7 we examined two diffusion indices—industrial production over a six-
month span and employment over a six-month span—and looked at how they behaved
during the 2001 and the 2007-2009 recessions. Which of the following statements is
true? - Answers - Both diffusion indices fell below 25% during the 2007-2009 recession,
but the lowest they got during the 2001 recession was about 30%
Which of the following statements is false? - Answers - The advance estimate of GDP is
released near the end of the last month of the quarter being measured.
Which of the following is a problem with using real GDP as an economic indicator? -
Answers - It is subject to substantial revisions that can in effect rewrite economic
history.
The highest unemployment rates usually occur - Answers - Several months after the
end of a recession.
Suppose during the third week in April 2015 there is a natural disaster that causes
3,000,000 workers in the United States suddenly and unexpectedly to lose their jobs.
How would this affect the unemployment rate for April 2015? - Answers - Have no effect
What is the definition of a person marginally attached to the labor force? - Answers -
Someone has not looked for a job within the past 4 weeks, but states that he wants to
work and has looked for a job during the past 12 months.
What is the name of the survey that collects the data used to calculate the
unemployment rate? - Answers - Current Population Survey
When the data is gathered to calculate the unemployment rate, how many households
are surveyed? - Answers - 60,000
Which of the following statements about the mean duration of unemployment is true? -
Answers - The mean duration of unemployment in late 2011 was about 40 weeks.
What is the definition of U6? - Answers - It is the unemployment rate obtained by adding
to the number of unemployed those people who are marginally attached to the labor
force including discouraged workers plus all workers who are classified as working part-
time for economic reasons.
When the data is gathered to calculate the unemployment rate for the month of August,
what share of households surveyed in August would have also been surveyed in July? -
Answers - 75%
What is the definition of U5? - Answers - It is the unemployment rate obtained by adding
to the number of unemployed those people who are marginally attached to the labor
force including discouraged workers.
When the data is gathered to calculate the unemployment rate, how long is a household
in the survey? - Answers - Four months in a row, then is out of the sample for 8 months,
and then it is in the sample the same four months the next year, then it is dropped from
the sample.
Prior to the 2008-2009 recession, the median duration of unemployment - Answers -
was typically, but not always, below 10 weeks
Which of the following criteria is concerned with whether output has declined enough for
a recession to have occurred? - Answers - Amplitude
A business cycle trough is best defined as - Answers - the point in time when a recovery
begins.
, According to the business-cycle approach to analyzing business cycles - Answers - the
economy can be in one of two states: an expansion or a recession.
We use the term business cycle - Answers - to emphasize that recessions and
recoveries are inevitable even though they do not represent cycles in a mathematical
sense.
During the 4th quarter of 2008 and the 1st quarter of 2009 real GDP declined by a rate
of over 6% per year. Which component of GDP was most responsible for these
declines? - Answers - gross private domestic investment expenditures
Which of the following is the best definition of GDP for the United States? - Answers -
The total market value of all final goods and services produced in the United States
during one year.
Suppose that the advanced estimate of real GDP for the 4th quarter suggests that GDP
during the 4th quarter grew faster than GDP during the 3rd quarter. On average, how
often will it turn out that according to the final revision of the data that real GDP during
the 4th quarter will still appear to have grown faster than it did during the 3rd quarter? -
Answers - 75%
Which of the following is not a way of measuring GDP? - Answers - The accrual method
or approach
Who determines the official turning points of business cycles? - Answers - The National
Bureau of Economic Research
What component of GDP automatically corrects for the problem of "where value is
produced?" - Answers - Net exports
During lecture 7 we examined two diffusion indices—industrial production over a six-
month span and employment over a six-month span—and looked at how they behaved
during the 2001 and the 2007-2009 recessions. Which of the following statements is
true? - Answers - Both diffusion indices fell below 25% during the 2007-2009 recession,
but the lowest they got during the 2001 recession was about 30%
Which of the following statements is false? - Answers - The advance estimate of GDP is
released near the end of the last month of the quarter being measured.
Which of the following is a problem with using real GDP as an economic indicator? -
Answers - It is subject to substantial revisions that can in effect rewrite economic
history.
The highest unemployment rates usually occur - Answers - Several months after the
end of a recession.
