25. The type of unemployment that occurs because of a recession is called: A. cyclical unemployment. B. the natural rate of unemployment. C. seasonal unemployment. D. frictional unemployment. 26. Karen chooses to go to university mime rather than to work. Karen: A. is not part of the labor force. B. is part of the labor force and what economists call a discouraged worker. C. is part of the labor force, but not actively seeking work. D. is considered employed. 2?. The unemployment rate in a town in which 65,400 persons are employed and 11,000 are unemployed equals: A. 20.2 %. B. 16.8%. C. 14.4%. D. 11%. 28. The unemployment rate may underestimate the true extent of unemployment if: A. many parttime employees would like to work 1111mm but are unable to get the additional work. B. employees increase the number of hours they work overtime. C. there are a large number of people working in the underground economy. D. people are pretending to look for work so that they can continue receiving unemployment benefits.5| 29. Keynesian economics focuses on explaining why recessions and depressions occur, as well as offering a for minimizing their effects. A. pricing strategy B. macro-economic model C. set of menu costs D. policy prescription 30. The Keynesian economic framework is based on an assumption that: A. an increase in government spending will cause the aggregate demand curve to shift to the left. B. prices and wages are sticky and do not adjust rapidly. C. an increase in government spending will cause the aggregate demand curve to shift to the left. D. people can afford a high level of government services. 31. According to macroeconomic theory, evidence that high unemployment may be accompanied by low inflation, and low unemployment may be accompanied by high inflation is supported by the: A. neoclassical expenditure-output model. B. Keynesian cross diagram. C. Keynesian Phillips curve tradeoff. D. Keynesian Inflation trade-off model. 32. The sum of all the income received for contributing resources to GDP is called A. national income (Y) B. national revenue (Y) C. marginal income (X) D. marginal revenue (X) 33. A price ceiling can be defined as: (a) Government establishing a minimum price at which a good or service can sell (b) Government establishing a maximum price at which a good or service can sell (c) Government establishing a price that is roughly equal to the market price (d) Government establishing a price that is 5% higher than the market equilibrium price. 34. The federal minimum wage is an example of: A. An equilibrium price B. A price floor C. A price ceiling D. An economy in disequilibrium 35. The opportunity cost of a decision: A. can be determined by considering both the benefits that flow from as well as the monetary costs incurred as a result of the action. B. can be determined by adding up the bills incurred as a result of the action. C. can be objectively determined only by economists. D. is the choice that is sacrificed when choosing the next best alternative.1. Explain the difference between a change (shift) in demand and a change in quantity demanded? What factors lead to a shift in demand? What leads to a change in quantity demanded? 2. Clearly explain what exactly the "natural rate of unemployment" is. 3. Using the demand curve below, A) show (draw) the effects of a shift in demand (an increase in demand and a decrease in demand at all price levels). B) Indicate the non- price variables that can lead to a shift in demand 20 P 14 D 8 O Quantity demanded 4. The following table provides details for the Gross Domestic Product for the U.S. a. Calculate GDP (the total of C + I + G + Net Exports) for 2011? b. What percentage did Gross Private Domestic Investment spending represent of total GDP for 2011? c. What percentage did consumer spending represent of total GDP? d. What percentage did total government spending represent of total GDPin 2011?2011 RealAnnual GDP (trillions) Personal consumption expenditures" Durable goods.................. 1161.9 Nondurable goods............... 2483.3 Services......................... 7077.4 Gross private domestic investment. 1913.6 Net exports of goods and services.. Total exports.......................... 2087.6 Total 1mports 2665.8 Government consumption expenditures and gross investment .............. Federal gov. expenditures 1232.7 State and local gov. expenditures........... 1797.0 5. Use the Table below to answer the question that follows: Quantity Quantity Quantity Price Supplied A Supplied B Supplied C S 100 60 0 0 $200 70 25 0 $300 80 45 5 In the table above, there are three suppliers, A, B, and C. According to the Table, at a price of $300 per unit, the market quantity supplied is: (a) 80 units. (b) 125 units. (0) 210 units. ((1) 95 units