Chapter 30

Garrett lost his job after the company closed during last year's recession.

Which of the following is a case of cyclical unemployment?

Timothy is looking for a job where he can apply his expertise in computer programming.

Which of the following is a case of frictional unemployment?

John, on temporary layoff from his work, awaits recall.

Which of the following is considered unemployed?

20

(Figure: Labor Market) Refer to the figure. If this market is initially in equilibrium when a $10 minimum wage is imposed, the quantity of labor employed will fall by:

50%

(Figure: Labor Market) Refer to the figure. What is the unemployment rate in this market as a result of the implementation of a $10 minimum wage?

700

(Figure: Labor Supply and Demand) Refer to the figure. How much will the quantity of labor employed decline as a result of the labor unions action to increase its wage demands to $11 an hour?

Both 1995 and 2005

(Table: Unemployment Statistics for Country X) Using the data in the table, Country X is likely to be in a recession in:

2.9%

(Table: Unemployment Statistics for Country X) Using the data in the table, what is the natural unemployment rate for this country in year 2005?

66%

A country has a population of 160 million. Thirty million of its people are under the age of 16 and 10% of the population is either in the military or institutionalized. Seventy million people have jobs, and five million are looking for work. What is the labor force participation rate in this country?

a labor market price floor.

A minimum wage is:

decrease.

Higher implicit tax rates tend to cause labor force participation rates to:

increase.

If a national government improves its unemployment benefits, its unemployment rate will most likely:

9.1%

If the adult population of a country is 200 million, 100 million are employed, and 10 million are unemployed, this country's unemployment rate is:

A large percentage of the population is aging and thus has retired.

In a country where both the labor force participation rate and the unemployment rate are very low, which of the following answers explains why this may be the case?

frictional unemployment

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?

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

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

higher labor force participation in the United States.

The implicit tax on working is less than 1% in the United States and over 2% in Belgium. Given this, we would expect:

understated.

The presence of discouraged workers causes the measured unemployment rate to be:

structural unemployment.

The shift toward more of a service economy and less of a manufacturing economy in the United States has caused an increase in:

remains constant.

When workers lose their jobs and become officially unemployed, the number of people in the labor force:

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

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

the enhancement of worker retraining programs

Which of the following elements reduces structural unemployment?

Heather recently graduated with her doctorate in economics. She is searching for a job that matches her skills.

Which of the following is the best example of frictional unemployment?

It is higher if structural or frictional unemployment is higher.

Which of the following is true of the natural unemployment rate?

cyclical unemployment

Which type of unemployment is likely to be higher when real GDP growth is lower?