Ch. 8 Josey

Which of the following most accurately describes how to calculate the unemployment rate?

(Unemployed / labor force) × 100

If 99 million people are working and 1 million are unemployed but actively seeking work, then the unemployment rate is:

1%.

(Table: Unemployment and Employment Data) Look at the table Unemployment and Employment Data. If marginally attached workers are included in the labor force and in the unemployment rate, the unemployment rate in this economy is:

3%. WRONG

(Table: Population Data for Estill County) Look at the table Population Data for Estill County. If marginally attached workers are included, the labor force in Estill County is:

6000 WRONG

Suppose that roughly 8 million people in the United States were actively seeking jobs but had not found them this month, the same number as last month. Suppose that 2 million of the people who were unemployed last month gave up their search this month and stopped looking for work. What will happen to the official unemployment rate this month, all other things unchanged?

It will fall, because 2 million people are not in the labor force this month and are not counted as unemployed.

(Figure: The Minimum Wage) Look at the figure The Minimum Wage. By how much does the quantity of labor demanded fall when the government imposes a binding minimum wage of P3?

Q4 - Q1 WRONG

Donna was laid off at the beginning of 2011. She looked for a job for three months but could not find anything suitable. She then decided to volunteer for a soup kitchen and stopped looking for a job. Donna is considered to be:

a discouraged worker.

One factor that raises the natural rate of unemployment is:

a population boom that increases the number of young workers joining the labor force.

When inflation rises quickly, borrowers will _____ and lenders will _____.

benefit; be hurt

A bank makes a loan for one year. The nominal annual interest rate is 7.5%. The real rate is 4%. Over the course of the year, overall prices increase by 4%. This rate of inflation hurt the _____ because the actual rate of inflation was _____ than the anticipated rate.

borrower; lower WRONG

Economists generally agree that sufficiently high minimum wage laws:

cause unemployment.

The National Bureau of Economic Research announced that the U.S. economic recession that began in December of 2007 hit a trough in June of 2009. During that period, which type of unemployment increased for sure?

cyclical

As the average age of the labor force increased from the end of the 1970s to the end of the 1990s, the natural rate of unemployment:

decreased

All of the following are costs of inflation EXCEPT _____ costs.

efficiency wage

The labor supply curve is positively sloped because:

employers are willing to hire more people at low wages. WRONG

Anna recently moved to Boston, as her husband, Joe, has a new job as an economics professor at Harvard. Anna is an experienced surgeon who is interviewing with several hospitals in Boston. Anna is:

frictionally unemployed.

If more women enter or reenter the labor force, the natural rate of unemployment is likely to:

increase.

The labor force is the total:

number of people who are employed or unemployed.

A survey reveals that on a small island initially 40 people have jobs, 10 people are not working but looking for jobs, and 30 people are neither working nor looking for work. Suppose that 10 of the 30 people who weren't working or looking for work now begin looking for work. There are now 20 people without jobs but looking for work and 40 people working. The unemployment rate:

rises to 33.3%.

Sam, who is 55 years old and has been a steelworker for 30 years, is unemployed because the steel plant in his town closed and moved to Mexico. Sam is _____ unemployed.

structurally

Which of the following situations is likely to increase the natural rate of unemployment?

the entrance of many new people into the labor force

The rate of unemployment when the economy is at full employment is:

the natural rate.

The natural rate of employment is achieved when:

there is no cyclical unemployment.

Unemployment rates are usually higher in Europe than in the United States because:

unemployment benefits are more generous in Europe than in the United States.

If deflation occurs and your income is fixed, your real income:

will go up.