Econ 102 Sample Test 2 Chapter 8

Suppose that the natural unemployment rate is 4.5 percent and the actual unemployment rate is 3.5 percent. Then cyclical unemployment is (A) -1 percent (B) 0 percent (C) 1 percent (D) 8 percent

(A) -1 percent

In the above table, the working age population is (A) 140 million (B) 225 million (C) 155 million (D) 100 million

(B) 225 million

If the population is 300 million, with 70 million under the age of 16 and institutionalized, another 70 million not in the labor force, 10 million unemployed, and 150 million employed, the employment-to-population rate is (A) 65.2 percent (B) 53.3 percent (C) 87.5 percent (D) 46.7 percent

(A) 65.2 percent

The above table shows answers given by people interviewed in the Current Population Survey. Which people are structurally unemployed? (A) B and C (B) A, B, and D (C) A, B, and C (D) A, B, C, and D

(A) B and C

An observer of the economy notices that over the past 12 months the unemployment rate has fallen from 7.0 percent to 6.5 percent. During the same time, the rate of growth in real GDP has been positive. From this information we might conclude that (A) an expansion is occurring in the economy (B) inflation is not occurring (C) a recession is in progress (D) a trough in the business cycle will soon be reached

(A) an expansion is occurring in the economy

The official U-3 unemployment rate includes the total number of people who (A) are available and looking for work but unable to find employment (B) would like to have a full-time job but we are working part-time (C) have jobs or are currently looking jobs (D) would like to have a job but have stopped seeking work

(A) are available and looking for work but unable to find employment

Suppose the country of Quasiland experienced a decrease in real GDP and people were laid off from their jobs. The people would be considered part of (A) cyclical unemployment (B) frictional unemployment (C) discouraged workers (D) structural unemployment

(A) cyclical unemployment

Unemployment that is the result of recessions is called (A) cyclical unemployment (B) downtime unemployment (C) structural unemployment (D) frictional unemployment

(A) cyclical unemployment

Cyclical unemployment _________ during expansions and ________ during recessions (A) decreases; increases (B) increases; increases (C) decreases; decreases (D) increases; decreases

(A) decreases; increases

Cyclical unemployment (A) fluctuates over the business cycle (B) decreases during a recession (C) is higher during an expansion (D) is always present in an economy

(A) fluctuates over the business cycle

When the economy is operating at full employment, the natural unemployment rate consists of only (A) frictional and structural unemployment (B) frictional and cyclical unemployment (C) cyclical unemployment (D) structural and cyclical unemployment

(A) frictional and structural unemployment

The official U-3 unemployment rate (A) includes persons without a job who have made efforts in the last week to find a job (B) counts discouraged workers as unemployed (C) counts people with part-time jobs who want full-time jobs as unemployed (D) includes persons without a job, whether they are actively searching for work or not

(A) includes persons without a job who have made efforts in the last week to find a job

From 1980 to 2000 the employment-to-population ratio generally ________ and from 2000 to 2015 the ratio generally ________ (A) increased; decreased (B) decreased; increased (C) increased; increased (D) decreased; increased

(A) increased; decreased

A discouraged worker _______ counted as officially unemployed and _______ counted as in the labor force (A) is not; is not (B) is; is not (C) is; is (D) is not; is

(A) is not; is not

Full employment occurs (A) only is the employment rate is equal to the natural unemployment rate (B) only if unemployment is equal to structural unemployment plus cyclical unemployment (C) only if the unemployment rate is zero (D) None of the above answers are correct

(A) only is the employment rate is equal to the natural unemployment rate

In the 2000's, video recordings were made primarily on DVD's. However, in the 2010's streaming movies became increasingly popular, leading to a sharp decline in DVD's. As a result, many people who manufactured DVD's lost their job and didn't have the skills necessary to work in jobs required to stream movies. This occurrence is best consider an example of (A) structural unemployment (B) underemployment (C) frictional unemployment (D) cyclical unemployment

(A) structural unemployment

Andrew just lost his job as corkscrew operator since his company has found a machine to perform his work tasks. Andrew did not have the skills needed to operate the machine. Andrew has searched for a new job for 6 months and continues to search. Therefore, Andrew is considered to be (A) structurally unemployed (B) frictionally unemployed (C) a discouraged worker (D) cyclically unemployed

(A) structurally unemployed

Frictional unemployment is (A) unemployment associated with the changing of jobs in a changing economy (B) unemployment associated with business cycle recessions (C) unemployment associated with declining industries (D) long-term unemployment

(A) unemployment associated with the changing of jobs in a changing economy

The labor force participation rate is percentage of the _____ who are in the labor force (A) working-age population (B) people over age 16 (C) people under age 65 (D) population

(A) working-age population

In the above table, the employment-to-population ratio is (A) 62 percent (B) 44 percent (C) 51 percent (D) 42 percent

(B) 44 percent

In a country with a working-age population of 100 million, 70 million workers are employed and 5 million workers are unemployed. What is the labor force participation rate? (A) 70 percent (B) 75 percent (C) 5 percent (D) 7 percent

(B) 75 percent

An individual who has stopped looking for a job but has looked in the past and still wants to job is referred to as (A) a productive worker (B) a marginally attached worker (C) a contingent worker (D) an unemployed worker

(B) a marginally attached worker

Which of the following is NOT considered to be in the labor force? (A) a person who is not working but who has tried to find a job in the past week (B) a person who is not working and who has not tried to find a job (C) a student who works part-time (D) a person who is waiting to start a new job in the next 30 days

(B) a person who is not working and who has not tried to find a job

Structural unemployment is (A) associated with the changing of jobs in a dynamic economy (B) associated with changed in technology that change required job skills (C) very short-term unemployment (D) associated with general downturns in the economy

(B) associated with changed in technology that change required job skills

The percentage of people employed aged 16 years and older divided by the working-aged population is known as the (A) labor force participation rate (B) employment-to-population ratio (C) working-age population ratio (D) employment rate

(B) employment-to-population ratio

Suppose that Matt quits a job with XYZ Corporation in order to look for more rewarding employment. Matt is best be considered as (A) included in the economy's "hidden employment" (B) frictionally unemployed (C) cyclically unemployed (D) still being employed

(B) fictionally unemployed

The type of unemployment created by the normal rate of reentry and entry into the labor force is (A) seasonal unemployment (B) frictional unemployment (C) cyclical employment (D) structual employment

(B) frictional unemployment

From 1980 to 2000 the labor-force participation rate generally ______ and from 2000 to 2015 the rate generally ________ (A) decreased; decreased (B) increased; decreased (C) increased; increased (D) decreased; increased

(B) increased; decreased

The natural unemployment rate (A) is the unemployment rate when there is only cyclical unemployment (B) is the unemployment rate at full employment (C) is the unemployment rate when there is no structural unemployment (D) occurs when the unemployment rate is 0 percent

(B) is the unemployment rate at full employment

From September 2013 to September 2014, the employment-to-population ratio increased from 58.6 percent to 59.0 percent. This change could have been the result of (A) discouraged workers starting to look for jobs again (B) unemployed workers becoming discouraged workers (C) a decrease in the working-age population (D) unemployed workers becoming part-time workers

(C) a decrease in the working-age population

The three types of unemployment are (A) frictional, part-time, and involuntary (B) voluntary, involuntary, and structural (C) frictional, structural, and cyclical (D) voluntary, part-time, and cyclical

(C) frictional, structural, and cyclical

If unemployment equals the natural unemployment rate, then there (A) is zero unemployment (B) are no job openings existing at the time (C) is only frictional or structural unemployment (D) is less than full employment

(C) is only frictional or structural unemployment

Suppose that the unemployment rate equals 4.5 percent and that the natural unemployment rate is 5.5 percent. We can conclude that (A) the output gap equals zero (B) we have mismeasured the natural unemployed rate (C) the output gap is positive (D) the output gap is negative

(C) the output gap is positive

Which labor market statistic tends to rise during recessions and fall during expansion (A) aggregate hours (B) the employment-to-population ratio (C) the unemployment rate (D) the labor-force participation rate

(C) the unemployment rate

The natural unemployment rate (1) occurs when only there is no cyclical unemployment present (2) is the unemployment rate when the economy is at potential GDP (A) 1 only (B) 2 only (C) neither 1 or 2 (D) 1 and 2

(D) 1 and 2

Suppose the current unemployment rate is 5 percent, the labor force is 400 million people, the labor force participation rate is 80 percent and the working-age population is 500 million people. What number of people are unemployed? (A) 5 million people (B) 25 million people (C) 100 million people (D) 20 million people

(D) 20 million people

Using the data in the above table, the unemployment rate is (A) 4.16 percent (B) 5.55 percent (C) 28.0 percent (D) 4.0 percent

(D) 4.0 percent

Using the information in the above table, the labor force participation rate is (A) 95.7 percent (B) 56 percent (C) 64.0 percent (D) 67.1 percent

(D) 67.1 percent

Using the definition of unemployment, which of the following individuals would be unemployed? (A) Because of the increased level of automobile imports, an employee General Motors is laid off but expects to be called back to work soon (B) Because of a reduction in the military budget, you next-door neighbor loses her job in a plant where nuclear warheads are made and must look for a new job (C) A full-time student quits school, enters the labor market for the first time, and searches for employment (D) All of these individuals are unemployed

(D) All of these individuals are unemployed

Bob inherits is a large sum of money from his dead uncles' estate. Bob decided to retire young, so he quits his job and heads to the Bahamas. Bob is an example of (A) structural unemployment (B) cyclical unemployment (C) frictional unemployment (D) None of the above is correct

(D) None of the above is correct

Suppose the population of Tiny Town is 100 people and the working age population is 70. If 10 of these people are unemployed, the unemployment rate in Tiny Town is (A) 10/80 x 100 (B) 10 percent (C) 10/70 x 100 (D) There is not enough information to calculate the unemployment rate

(D) There is not enough information to calculate the unemployment rate

Catherine quit her job in order to look for a new one; therefore, she is best considered as (A) cyclically unemployed (B) structurally unemployed (C) seasonally unemployed (D) frictionally unemployed

(D) fictionally unemployed

The natural unemployment rate (A) is attained whenever the unemployment rate is less than 5 percent because 95 percent employment is considered full employment (B) estimated to be close to 9 percent in recent years in the United States (C) occurs when 100 percent of the labor force is employed (D) has been estimated to range between 4 percent and 6 percent in the United States in recent years

(D) has been estimated to range between 4 percent and 6 percent in the United States in recent years

The labor force participation rate shows the percentage of (A) people not working, but want to work (B) new entrants into the labor force (C) people who are not actively participating in meaningful economic activity (D) non-institutionalized working-age people who are actually working or seeking employment

(D) non-institutionalized working-age people who are actually working or seeking employment

Marginally attached workers fall into which of the following population categories? (A) unemployed (B) employed (C) labor force (D) not in the labor force

(D) not in the labor force

Suppose that the number of jobs in the fishing industry decreases but the number of jobs in the travel industry increases. Initially, (A) there is a shortage of workers in both sectors (B) cyclical unemployment increases (C) the economy remains at full employment (D) structural unemployment increases

(D) structural unemployment increases

The labor force is defined as the (A) number of people who are working (B) number of people who are blue-collar jobs (C) number of people over 16 years of age (D) sum of employed and unemployed people

(D) sum of employed and unemployed people

The unemployment rate is measured as (A) an indicator for potential inflation (B) the number of people that want to work but cannot find jobs out of the entire population (C) an indicator to determine long-term economic growth (D) the percentage of people in the labor force who are unemployed

(D) the percentage of people in the labor force who are unemployed

Full employment occurs when (A) there is no frictional unemployment (B) the unemployment rate is less than 5 percent (C) there is no unemployment (D) there is no cyclical unemployment

(D) there is no cyclical unemployment

In September 2014, the official U-3 unemployment rate dropped from 6.1 percent to 5.9 percent. This change could have been caused by (A) workers who had previously given up looking for a job starting to look again (B) part-time workers getting a full-time job (C) full-time workers becoming part-time workers (D) unemployed workers giving up looking for a job

(D) unemployed workers giving up looking for a job