ECON 202 Ch 9 questions

If the number of unemployed workers is 30 million, the number in the working-age population is500 million, and the unemployment rate is 10%, what is the labor force participation rate? A) 60% B) 94% C) 67% D) 84% E) 80%

A) 60%

Which of the following statements correctly differentiates between unemployed workers and discouraged workers? A) Unemployed workers are counted in the labor force, but discouraged workers are excluded from the labor force. B) Unemployed workers do not have a paid job, while discouraged workers have a paid job. C) The unemployment benefits received by unemployed workers are not capped, while the unemployment benefits received by discouraged workers are capped at a maximum. D) Unemployed workers refer to the skilled workers who have been laid off, while discouraged workers refer to the unskilled workers who have lost their jobs.

A) Unemployed workers are counted in the labor force, but discouraged workers are excluded from the labor force.

The demand for refrigerators falls when the economy enters a downturn. If a refrigerator manufacturer lays off workers during an economic downturn, this would be an example of: A) cyclical unemployment. B) structural unemployment. C) frictional unemployment. D) natural unemployment.

A) cyclical unemployment.

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) frictionally unemployed.

Rosina Gonzales quit her job in Pennsylvania and moved to California to be close to her family. She is currently looking for work, so she would be considered A) frictionally unemployed. B) cyclically unemployed. C) a discouraged worker. D) seasonally unemployed.

A) frictionally unemployed.

In a recession, the number of ʺdiscouraged workersʺ is likely to _______________. Thus, the actualunemployment situation is likely ________________ the official unemployment numbers tell usduring the recession. A) increase ; worse than B) decrease ; worse than C) increase ; better than D) decrease ; better than

A) increase ; worse than

Which of the following has a tendency to raise the unemployment rate? A) increasing the minimum wage in an economy B) reducing labor unions membership in an economy C) offering wages at the equilibrium wage rate D) reducing unemployment insurance in an economy E) More than one of the above is correct.

A) increasing the minimum wage in an economy

The labor demand curve: A) is provided by firms who want to hire workers at each given wage. B) shows the number of workers who are willing and able to work at higher wages. C) shows that the number of people who want to work increases as the wage increases. D) is made up of workers who want to work for firms at each given wage

A) is provided by firms who want to hire workers at each given wage.

We would expect that policies to protect workers would: A) lead to greater unemployment .B) have no impact on unemployment. C) lead to less unemployment. D) affect those seasonally unemployed more profoundly than other unemployed workers.

A) lead to greater unemployment

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) lead to greater unemployment.

Discouraged workers are classified by the BLS as A) out of the labor force. B) unemployed. C) part of the labor force. D) employed. E) More than one of the above is correct

A) out of the labor force.

If the working-age population in an economy increases, while the size of the labor force remains unchanged, ________. A) the labor force participation rate will fall B) the labor force participation rate will remain unaffected C) the natural rate of unemployment will increase D) the labor force participation rate will increase

A) the labor force participation rate will fall

When growth goes down, unemployment tends to go: A) up shortly after, and vice versa. B) down at the same time, and vice versa. C) up at the same time, but remains sticky on the way down and lags behind. D) down shortly after, and vice versa.

A) up shortly after, and vice versa.

If the number of unemployed workers is 19 million, the number in the working-age population is500 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

B) 1 million

If the number of unemployed workers is 19 million, the number in the working-age population is500 million, and the unemployment rate is 4%, what is the labor force participation rate? A) 4.75% B) 95% C) 7.8% D) 78% E) 96.2%

B) 95%

Which of the following causes the unemployment rate to overstate the true extent of joblessness? A) Discouraged workers are counted as unemployed. B) A drug dealer reports herself as unemployed. C) People who donʹt want to work and donʹt try to find a job are not considered part of the laborforce. D) Discouraged workers are not counted as unemployed. E) More than one of the above

B) A drug dealer reports herself as unemployed.

Which of the following is not the result of wage stickiness in an economic downturn? A) Cyclical unemployment. B) A shortage of labor. C) Actual wages are temporarily above the market-clearing level. D) A surplus of labor.

B) A shortage of labor.

Which of the following is an example of a worker experiencing structural unemployment? A) A college student who graduated last month and began looking for work. B) An assembly line worker who loses his job because of automation. C) A Freightliner employee that got laid off because of the recession of 2001. D) A worker quits his job because he does not get along with his boss. E) A worker that changes jobs to move closer her family.

B) An assembly line worker who loses his job because of automation.

Members of the military are currently not included in the employment, labor force, and working-age population statistics. What impact would including members of the military in these statistics have on the unemployment rate and the labor force participation rate? A) Including the military would reduce both the unemployment rate and the labor force participation rate. B) Including members of the military would reduce the unemployment rate and increase the labor force participation rate. C) Including the military would increase both the unemployment rate and the labor force participation rate. D) Including members of the military would increase the unemployment rate and reduce the labor force participation rate.

B) Including members of the military would reduce the unemployment rate and increase the labor force participation rate.

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) efficiency wages.

We donʹt typically see wages ________ in response to an economic downturn because ________. A) rise; they are ʺsticky,ʺ and are slow to respond to shifts in the economy B) fall; they are ʺstickyʺ and are slow to respond to shifts in the economy C) rise; they cannot rise above the equilibrium in any circumstance D) fall; they cannot fall below where they were previously set due to inflation

B) fall; they are ʺstickyʺ and are slow to respond to shifts in the economy

The advice to ʺkeep searching, there are plenty of jobs around here for which you are qualified,ʺwould be most appropriate for which of the following types of unemployment? A) cyclical unemployment B) frictional unemployment C) seasonal unemployment D) structural unemployment

B) frictional unemployment

An increase in the minimum wage causes the quantity supplied of labor to _______, the quantitydemanded 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) increase ; decrease ; surplus

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) it prolongs the job search, but reduces the number of job searches a person has to make.

Discouraged workers are classified by the BLS as A) unemployed. B) out of the labor force. C) part of the labor force. D) employed E) More than one of the above is correct

B) out of the labor force.

The labor supply curve: A) has a negative slope. B) shows that all things being equal, more workers will want to work when wages are higher, and less will want to work when wages are lower. C) shows the relationship between the total quantity of labor supplied by all firms in the economy and the wage rate. D) All of these are true.

B) shows that all things being equal, more workers will want to work when wages are higher, and less will want to work when wages are lower.

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

B) understates

Which of the following is an example of a worker experiencing cyclical unemployment? A) A worker quits his job because he does not get along with his boss. B) A lifeguard who was hired during the summer season is laid off after summer is over. C) A Freightliner employee that got laid off because of the recession of 2001. D) An assembly line worker who loses his job because of automation. E) A worker that changes jobs to move closer her family

C) A Freightliner employee that got laid off because of the recession of 2001.

If there is frictional unemployment, then the number of available jobs is __________ the number of available workers. A) less than B) equal to C) Both of the above are possible

C) Both of the above are possible

Which of the following explains why frictional unemployment exists in an economy? A) It arises because unemployment benefits encourage workers not to look for jobs. B) It arises because most of the workers donʹt work very hard in their jobs, thus producing friction between employers and employees. C) It arises because it takes time for an unemployed worker to find a firm with a well-matched job vacancy. D) It arises because job search is completely a supply-side phenomenon in the labor market, and firms make no attempts to advertise for the vacancies they have.

C) It arises because it takes time for an unemployed worker to find a firm with a well-matched job vacancy.

An economic slow-down would cause the labor: A) supply curve to shift left. B) supply curve to shift right. C) demand curve to shift left. D) demand curve to shift right.

C) demand curve to shift left.

Suppose that you suspect that the number of ʺdiscouraged workersʺ has increased over the last year. Which of the following pieces of information would support your suspicion? A) the unemployment rate has risen over the last year B) the number of unemployed people has risen over the last year C) the labor force participation rate has fallen over the last year D) the number of employed people has risen over the last year

C) the labor force participation rate has fallen over the last year

In January of 2001, the population of the United States was 276.8 million, the working -age population was 210.2 million, the total number of people ʺemployedʺ and ʺunemployedʺ was 145.0million, and the total number of unemployed people was 5.5 million. What was the unemployment rate? A) 8.1 percent B) 2.4 percent C) 10.0 percent D) 3.8 percent

D) 3.8 percent

Which of the following is correct? A) Adults not in the labor force = adult population - employed workers B) Adults not in the labor force = unemployed workers C) Adults not in the labor force = unemployed workers - employed workers D) Adults not in the labor force = adult population - employed workers - unemployed workers

D) Adults not in the labor force = adult population - employed workers - unemployed workers

Employers choose to offer efficiency wages because: A) it will reduce turnover, saving the employer time and money to hire and train new workers. B) it has proven to make workers more productive. C) they give employees an incentive to work hard to keep their jobs. D) All of these are true.

D) All of these are true.

Sarah is a full-time student who is not looking for work. What kind of unemployment is Sarahexperiencing? A) structural B) cyclical C) frictional D) Sarah is not experiencing unemployment of any kind because she is not currently part of the labor force.

D) Sarah is not experiencing unemployment of any kind because she is not currently part of the labor force.

Suppose that 100 people that were officially classified as ʺunemployedʺ quit looking for work in order to go back to school full-time. This change will cause: A) no change in the unemployment rate and a decrease in the labor force participation rate. B) an increase in the unemployment rate and an increase in the labor force participation rate. C) a decrease in the unemployment rate and no change in the labor force participation rate. D) a decrease in the unemployment rate and a decrease in the labor force participation rate. E) an increase in the unemployment rate and a decrease in the labor force participation rate.

D) a decrease in the unemployment rate and a decrease in the labor force participation rate.

Minimum wage laws cause unemployment because the legal minimum wage is set A) too low, thus discouraging more workers. B) above the market wage, causing the quantity of labor demanded to be greater than the quantity of labor supplied. C) below the market wage, causing the quantity of labor demanded to be greater than the quantity of labor supplied. D) above the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied. E) below the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied.

D) above the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied.

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) an increase in the unemployment rate

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) an increase in the unemployment rate.

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) both frictional and structural unemployment

Economists say that the economy is at ʺthe natural rate of unemploymentʺ when: A) the total unemployment rate is zero. B) the structural unemployment rate is zero. C) the frictional unemployment rate is zero. D) cyclical unemployment is zero. E) None of the above.

D) cyclical unemployment is zero.

Suppose that an economy moves from a recession to an expansion. As the economy improves, the number of discouraged workers likely _________. This change in the number of discouraged workers, other things equal, causes the unemployment rate to __________. A) increases ; increase B) increases ; decrease C) decreases ; decrease D) decreases ; increase

D) decreases ; increase

Which of the following has a tendency to reduce the unemployment rate? A) firms begin offering wages above the equilibrium wage rate B) increasing the minimum wage in an economy C) a law which does not allow firms to advertise job openings on the internet D) decreasing unemployment insurance in an economy E) More than one of the above is correct.

D) decreasing unemployment insurance in an economy

Bill has graduated with his degree in economics. Through Career Services he submitted his resume to several companies and he will visit them during the next two weeks. Bill is considered A) structurally unemployed. B) cyclically unemployed. C) not in the labor force. D) frictionally unemployed.

D) frictionally unemployed.

The natural rate of unemployment means that A) everyone who wants a job has a job, although it may not be the job they really want. B) the sum of structural and cyclical unemployment is greater than frictional unemployment. C) everyone who wants a job has a job, and they have the job they most prefer. D) only frictional, structural, and classical (real-wage) unemployment exist.

D) only frictional, structural, and classical (real-wage) unemployment exist.

The natural rate of unemployment means that A) everyone who wants a job has a job, and they have the job they most prefer. B) everyone who wants a job has a job, although it may not be the job they really want. C) the sum of structural and cyclical unemployment is greater than frictional unemployment. D) only frictional, structural, and classical (real-wage) unemployment exist.

D) only frictional, structural, and classical (real-wage) unemployment exist.

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) structurally unemployed

If the number of unemployed workers is 50 million, the number in the working-age population is500 million, and the unemployment rate is 12.5%, what is the labor force participation rate? A) 87.5% B) 90% C) 22.5% D) 67% E) 80%

E) 80%

Which of the following causes the unemployment rate to overstate the true extent of joblessness? A) A drug dealer reports herself as unemployed. B) Discouraged workers are counted as unemployed. C) Discouraged workers are not counted as unemployed. D) Persons who collect unemployment benefits report themselves to be searching for a job even if they do not actually want a job. E) More than one of the above causes the unemployment rate to overstate the true extent of joblessness.

E) More than one of the above causes the unemployment rate to overstate the true extent of joblessness.

Establishing a state employment agency that speeds up the process of matching unemployed workers with unfilled jobs is an attempt to lower A) cyclical unemployment. B) unnatural unemployment. C) structural unemployment. D) cyclical unemployment. E) frictional unemployment.

E) frictional unemployment.

People who lost their jobs as hand-drawn animators because of the popularity of computer-generated 3D animation are examples of persons who are suffering A) frictional unemployment. B) unnatural unemployment. C) classical unemployment. D) cyclical unemployment. E) structural unemployment.

E) structural unemployment.