chpt 11 - unemployment & labor force participation

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A country has 24 million people in the labor force and 21.5 million of them are employed. What is the unemployment rate in this country?

10.4 percent

(Table: Unemployment Statistics for Country X) Using the data in the table, what is the natural unemployment rate for this country in the year 1995?

4 percent

What affects labor force participation rates?

A. the demographic structure of a population B. the tax structure of an economy C. technological advances such as the birth control pill D. Each of these influences affects the labor force participation rate. Answer - D

Which of the following programs could help overcome structural unemployment?

A. worker retraining B. limitations to unemployment benefits C. job search assistance programs D. Each of these answers is correct. Answer- D

What problem do employment protection laws create?

Employers are reluctant to hire new workers.

Structural unemployment is more persistent in France than in the United States because

French workers have less incentive to quickly seek a new position since their unemployment benefits are much higher.

Why is the unemployment rate considered to be an incomplete indicator of the health of the labor market? I. because it does not measure how well people are matched to the jobs they do II. because the definition of discouraged workers is not clear III. because it does not correctly define the adult population

I and II only

Why has technology lowered frictional unemployment over time? I. Many people who used to be frictionally unemployed are now employed in the technology sector. II. The Internet has made it easier and faster for people to search for jobs that require their particular skill sets. III. The Internet has made posting jobs easier and faster for employers.

II and III only

Unemployment correlated with the business cycle is called

cyclical unemployment.

Higher GDP growth

decreases the unemployment rate.

What is the term for workers who have given up looking for a job but would still like one?

discouraged workers

The labor force is made up of

employed and unemployed workers.

What type of laws affects young, minority, and unemployed workers most negatively?

employment protection

Several years ago, the rising popularity of Barnes & Noble and Borders shifted workers from independent bookshops to larger chains. What type of unemployment was associated with this reallocation of the work force?

frictional unemployment

What is the unemployment rate for a nation with 6 million employed and 2 million unemployed?

25 percent

According to the accompanying labor data, the unemployment rate is _________ and the labor force participation rate is __________.

7.5 percent; 75 percent

Which of the following best describes the effects of a major labor union that maintains a union wage above the market equilibrium wage?

The quantity of labor supplied exceeds the quantity of labor demanded, and the unemployment rate increases.

Which of the following individuals can be counted as unemployed?

a man who was laid off from an auto manufacturing plant in Detroit

How can people who are laid off from work due to a recession eventually turn into structurally unemployed people?

by staying unemployed so long that their skills become outdated

Frictional unemployment is caused by:

creative destruction.

Since 1950, the female labor force participation rate in the United States

has risen.

Compared to the United States, unemployment rates in Western Europe tend to be

higher because of more labor regulations.

Which of the following individuals can be counted as part of the labor force?

someone who is collecting unemployment benefits

The natural unemployment rate is defined as the

structural plus frictional unemployment rates.

A worker repairing VHS cassette-tape players was laid off because most of his customers have started using DVD players. This worker is now

structurally unemployed.


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