f potential output exceeds actual real output by a wide margin, this implies:

Multiple Choice

• an excess of imports over exports
• that the majority of consumer demand has changed from goods to services
• that the majority of consumer demand has changed from services to goods
• a sharply rising price level
• a high rate of unemployment

Cyclical unemployment is a consequence of:

Multiple Choice

• technological change
• the everyday dynamics of a free labour market
• seasonal changes in the labour market
• downturns in the economy
• the decreasing relative importance of goods and the increasing relative importance of services in our economy

To be officially unemployed, a person must:

Multiple Choice

• be collecting Employment Insurance
• have just lost a job
• be in the labour force
• be waiting to be called back from a layoff
• be 21 years of age or older

At the economy's natural rate of unemployment:

Multiple Choice

• only seasonal unemployment exists
• only frictional unemployment exists
• there is a relatively low level of cyclical unemployment
• the economy achieves its potential output
• only structural unemployment exists

The presence of discouraged workers:

Multiple Choice

• reduces the size of the labour force, but does not affect the unemployment rate
• increases the size of the labour force, but does not affect the unemployment rate
• may cause the official unemployment rate to understate the level of unemployment
• may cause the official unemployment rate to overstate the level of unemployment
• increases both the size of the labour force and the unemployment rate