Economic Indicators and the Business Cycle
What happens to government spending during an expansionary fiscal policy aimed at reducing unemployment?
It fluctuates unpredictably.
It decreases.
It increases.
It stays the same.
How would a government typically fund an increase in social safety net programs during economic downturns to assist the unemployed?
Sell off significant amounts of national parks or other public lands
Divert all foreign aid funds directly into social programs
Dramatically reduce military spending exclusively
Issue more government bonds
Which group is included in the calculation of the official unemployment rate?
Individuals who have given up looking for work
Individuals without a job who have actively looked for work in the past four weeks
Retired individuals not seeking employment
Students full-time not seeking employment
Which type of unemployment occurs when there is a downturn in the business cycle?
Seasonal unemployment
Structural unemployment
Cyclical unemployment
Frictional unemployment
How could contractionary fiscal policy indirectly lead to an increase in unemployment?
Through increased budget surpluses that fund higher education grants creating overqualification.
By cutting subsidies for job training programs thus reducing workers' skill levels.
By increasing taxes which directly removes jobs from the public sector.
Through reduced government spending leading to decreased aggregate demand and therefore lower production needs.
What type of unemployment occurs when a construction worker loses their job because the project was completed?
Structural unemployment
Cyclical unemployment
Seasonal unemployment
Frictional unemployment
What is an indirect consequence that might arise from persistent exchange rate devaluation affecting a nation's balance of payments?
A structural improvement in fiscal policy efficiency arises from better terms of trade adjustments.
Inflationary pressures could increase due to higher prices for imported goods and services.
A long-term surplus in the capital account due to enhanced export revenue accumulation occurs.
Deflation might occur because imported raw material costs are reduced in domestic currency terms.

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Which of the following is a measure of unemployment that includes discouraged workers and individuals working part-time for economic reasons?
U-3 unemployment rate
U-1 unemployment rate
U-4 unemployment rate
U-6 unemployment rate
Which of the following is an example of frictional unemployment?
A worker losing their job due to a recession in the manufacturing sector.
A business laying off employees due to a decline in demand for its products.
A worker being temporarily laid off due to a natural disaster.
A recent college graduate actively searching for their first job.
Which of the following is an example of demand-deficient unemployment?
A person voluntarily quitting their job to pursue further education.
A worker transitioning between jobs and temporarily unemployed.
A worker losing their job due to technological advancements.
A business laying off employees during an economic recession.