Matching
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Identifying Key Terms
Match each term with the correct
statement below. a. | census | f. | food stamps | b. | inflation | g. | fixed income | c. | discouraged worker | h. | full employment | d. | unemployment
rate | i. | price
index | e. | enterprise zone | j. | hyperinflation |
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1.
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percentage of the nation’s labor force that is not employed
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2.
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a general increase in prices
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3.
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income that does not increase even when prices go up
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4.
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area where companies can locate free of certain local, state, and federal taxes
and restrictions
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5.
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a person who wants a job but has given up looking
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6.
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a measurement that shows how the average price of a standard group of goods
changes over time
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7.
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government-issued coupons that are exchanged for food
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8.
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an official count of the population
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Multiple Choice
Identify the
choice that best completes the statement or answers the question.
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9.
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What is the difference between seasonal unemployment and structural
unemployment?
a. | Seasonal unemployment occurs because of schedules, whereas structural occurs because
people lack skills. | b. | Seasonal unemployment is rare in a modern
society, whereas structural is not. | c. | Seasonal unemployment occurs only in the
summer, whereas structural can occur all year round. | d. | Seasonal unemployment is generally among
low-paid workers, whereas structural is among the highly paid. |
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10.
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When the economy is working properly, what is the unemployment rate?
a. | 0 to 3 percent | c. | 8 to 10 percent | b. | 4 to 6 percent | d. | 10 to 12
percent |
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11.
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The “market basket” that is used by the Bureau of Labor Statistics
to calculate prices is made up of which of the following?
a. | food items only | b. | nonfood items only | c. | typical goods and
services for an urban household | d. | food and necessary services for any
family |
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12.
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How has the distribution of income in the United States changed over the last 20
years?
a. | It has become more equal. | b. | It has become less equal. | c. | It became more equal
for about 10 years but has become less equal. | d. | It has not changed
appreciably. |
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13.
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What is workfare?
a. | welfare that is limited to preschool-age children | b. | a state-by-state
grant program of aid to the elderly | c. | a program that requires work in exchange for
assistance | d. | an early poverty program from the 1950s |
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14.
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How does the Bureau of Labor Statistics determine how the market basket should
change over time?
a. | by evaluating the census | b. | by conducting a Consumer Expenditure
Survey | c. | by calculating the inflation rate | d. | by computing the Consumer Price
Index |
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15.
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What does it mean when a person is underemployed?
a. | The person has been working but now is laid off. | b. | The person is
looking for work in a special field. | c. | The person is not making as much money as they
need. | d. | The person has a job but they are overqualified for
it. |
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16.
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According to the demand-pull theory, what is responsible for inflation?
a. | Producers raise prices to meet existing demand. | b. | The economy is in a
wage-price spiral. | c. | Too much money is in
circulation. | d. | Demand for goods and services exceeds existing
supply. |
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17.
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What is a major problem for businesses during a period of chronic
inflation?
a. | They cannot anticipate their costs. | b. | Their money loses its
value. | c. | They do not know when the inflation will stop. | d. | They have difficulty
hiring help. |
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18.
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Which of the following is a result of unemployment that is very low?
a. | The few people who are unemployed stop looking for jobs. | b. | Wages drop below the
level of minimum wage. | c. | Companies have difficulties recruiting
workers. | d. | Companies stop looking for people to fill unfilled
jobs. |
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Short Answer
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19.
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What does the curved line represent in the graph?
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20.
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What percentage of total income does the highest fifth of the population
receive?
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21.
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What does the area between the straight line and the Lorenz curve stand
for?
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Essay
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Critical Thinking
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22.
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Determining Relevance What is the relationship between full employment
and cyclical, structural, and seasonal unemployment?
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23.
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Making Comparisons What are the possible outcomes of the change from Aid
to Families with Dependent Children to Temporary Assistance to Needy Families?
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24.
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Identifying Central Issues How does the Bureau of Labor Statistics
calculate the rise in prices each year?
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