Part A -

1. Which statement is not true?

A. The cyclical unemployment is mostly determined by short-run ups and downs of economic activity.
B. Natural rate of unemployment approaches to zero in the long run.
C. Natural rate of unemployment is the combination of frictional and structural unemployment.
D. Frictional unemployment is created by sectoral shifts.

2. If the population of employed workers in an economy is 100 million and the population of the unemployed is 20 million, the unemployment rate in this economy is:

A. 120 %
B. 83.33%
C. 92.46%
D. 65.34%

3. The labor force in previous question is:

A. 100 million
B. 80 million
C. 1.2 million
D. 120 million

4. How can we find the labor-force participation rate in question 2?

A. We need to know the nation's population.
B. By finding the ratio of employed to the total labor force.
C. We need to know the population of adults.
D. We need to know the population of people who want to work but cannot find a job.

Part B -

1. How can policy makers increase economic growth?

a. By providing public education.
b. By encouraging people to save more.
c. By funding research programs.
d. All of the above.

2. The approximate growth rate of real GDP per person in the United States is:

a. 8%
b. 0.7%
c. 2%
d. 4.5%

3. Thetraditionalviewoftheproductionprocessisthatcapitalis subject to diminishing returns. This implies that:

a. as the stock of capital rises, the extra output produced from an additional unit of capital rises.
b. as the stock of capital rises, the extra output produced from an additional unit of capital falls.
c. as the stock of capital rises, the output produced from an additional unit of capital falls.
d. as the stock of capital rises, the output produced from an additional unit of capital rises.

4. Becauseofdiminishingreturns,anincreaseinthesavingrate leads to:

a. lower growth.
b. higher growth infinitely.
c. higher growth only for a while.
d. no change in growth.

5. The money supply includes all of the following except

a. metal coins.
b. paper currency.
c. lines of credit accessible with credit cards.
d. bank balances accessible with debit cards.