Chapter 9

55) Ameer just quit his job as a shoe salesman and is looking for work as an accountant, which is what his college degree is in. Ameer would be considered: A) frictionally unemployed. B) cyclically unemployed. C) structurally unemployed D) Ameer is not in the labor force.

A

57) Policies that make it more difficult to fire an employee are likely to: A) lead to greater unemployment. B) have no impact on unemployment. C) affect frictionally unemployed workers more than other unemployed workers. D) lead to less unemployment.

A

unemployment insurance

a government program that partially protects workers' incomes when they become unemployed

discouraged workers

nonworking people who are capable of working but have given up looking for a job due to the state of the job market

natural rate of unemployment

the normal rate of unemployment around which the unemployment rate fluctuates

unemployment rate

the percentage of the labor force that is unemployed

labor force participation rate

the percentage of the working-age population in the labor force

labor force

the total number of workers, including both the employed and the unemployed

structural unemployment

unemployment that occurs when workers' skills do not match the jobs that are available

frictional unemployment

unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills

cyclical unemployment

unemployment that rises during economic downturns and falls when the economy improves

Underemployed

working at a job for which one is overqualified, or working part-time when full-time work is desired

labor union

An organization of workers that tries to improve working conditions, wages, and benefits for its members

8) An increase in cyclical unemployment will result in A) an increase in structural unemployment. B) a decrease in frictional unemployment. C) an increase in the natural rate of unemployment. D) an increase in the unemployment rate. E) More than one of the above is correct.

D

17) How would you best describe a manufacturing employee who has been fired because he was replaced by a robot (new technology) and does not have the skills necessary to help operate the robot? A) cyclically unemployed B) job leaver C) entrant/reentrant D) structurally unemployed

D

18) An increase in frictional unemployment will result in A) an increase in structural unemployment. B) a decrease in the natural rate of unemployment. C) a decrease in cyclical unemployment. D) an increase in the unemployment rate. E) More than one of the above is correct.

D

43) For which type(s) of unemployment is it possible that the number of available workers and the number of available jobs are equal? A) structural unemployment B) cyclical unemployment C) frictional unemployment D) both frictional and structural unemployment E) None of the above

D

unemployment

Measures the number of people who are able to work, but do not have a job during a period of time.

Real wage unemployment

Unemployment caused by real wages being stuck above the equilibrium real wage

Classical unemployment

Unemployment due to real wages being too high (e.g., through minimum wage laws).

efficiency wages

above-equilibrium wages paid by firms to increase worker productivity

25) The trade-offs in the effect of unemployment insurance are: A) it reduces incentive to accept a job, but reduces the number of job offers typically made. B) it prolongs the job search, but reduces the number of job searches a person has to make. C) it is free money and makes people lazy, but without it people would starve. D) it shortens the job search, but lengthens the number of times a person will switch careers.

b

46) In general, economists believe that the measured unemployment rate _________________ the actual amount of joblessness in the economy. A) overstates B) understates C) correctly measures

b

54) Wages that are above the wage that workers would be willing to accept, where the premium is paid to increase worker productivity, are referred to as: A) wage floors. B) efficiency wages. C) wage ceilings. D) productivity wages.

b

58) An increase in the minimum wage causes the quantity supplied of labor to _______, the quantity demanded of labor ______, and thus causes a ______________ of labor. A) decrease ; increase ; shortage B) increase ; decrease ; surplus C) increase ; decrease ; shortage D) decrease ; increase ; surplus

b

2) If the number of unemployed workers is 19 million, the number in the working-age population is 500 million, and the unemployment rate is 4%, how many workers are in the labor force? A) 20 million B) 1 million C) 481 million D) 475 million E) None of the above

d