Econ Chapter 8 Unemployment

A survey reveals that, on a small island, 40 people have jobs, 10 people are not working but are looking for jobs, and 30 people are neither working nor looking for work. The unemployment rate on the island is _____%.

20

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

During a recession:

unemployment increases and the growth rate of real GDP decreases.

In 2017, 10 million people did not have a job but were actively looking for employment, and 85 million people had either a full-time or a part-time job. The unemployment rate in 2017 was _____%.

10.5

Unemployment rates are usually HIGHEST for:

African American teenagers.

Which example illustrates cyclical unemployment?

An autoworker is laid off because a recession has caused a decline in sales.

The Bureau of Labor Statistics calls a person who is out of work, would like to work, but has given up looking for work:

a discouraged worker.

Structural unemployment CANNOT be caused by:

fluctuations in the business cycle.

People who are changing jobs are counted in _____ unemployment.

frictional

You are a college student and NOT working or looking for work. You are:

not part of the labor force.

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 are 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%.

Structural unemployment consists of people who are unemployed because of:

there being more job hunters than there are jobs.

Jim has a part-time job. He would prefer to have a full-time job but has been unable to find one. Jim is classified as:

underemployed

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

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

A recent college graduate with a major in economics attends a job fair but has not yet found a job. This graduate is counted as a _____ unemployed worker.

frictionally

Unemployment is at its natural level if there is no:

cyclical unemployment.

According to the Bureau of Labor Statistics, the actual unemployment rate was 8.3% in February 2012 and the natural rate of unemployment was 5.2%. The _____ unemployment rate was _____%.

cyclical; 3.1

Internet employment agencies have simplified the job search for the applicants. They have also led to a(n) _____ unemployment.

decrease in frictional

The natural rate of unemployment is:

equal to the sum of frictional and structural unemployment.

If the actual unemployment rate is 7% and the cyclical unemployment rate is 2%, then the natural rate of unemployment is:5%.

5%.

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.

A binding minimum wage in a labor market is set _____ the equilibrium wage and causes a _____ of labor.

above; surplus

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

When the economy is at full employment, _____ is zero.

cyclical unemployment

Anna recently moved to Boston with her husband Joe, who 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.

An example of structural unemployment is a(n):

geologist who is permanently laid off because of an increase in wages won by labor unions.

Generous unemployment benefits are likely to cause a(n):

increase in the unemployment rate.

Firms pay an efficiency wage because:

it reduces the risk of losing the best workers.

Cyclical unemployment is the result of:

the business cycle.

Which situation 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.