Econ Chapter 6

The average U.S. unemployment rate from 1948 has been about A) 2.7 percent. B) 19.7 percent. C) 15.7 percent. D) 5.8 percent. E) 10.7 percent.

5.8 percent

If the number of employed people is 150 million, the number of unemployed people is 50 million, and the working-age population equals 285 million people, the labor force participation rate is A) 17.5 percent. B) 52.6 percent. C) 81 percent. D) 25 percent. E) 70.2 percent.

70.2 percent

Consider the following people: ∙ Chris quits his job as an automobile mechanic to pursue his college education full-time. ∙ Darrelo was laid off from her technical support job because of a strike by production workers and is currently looking for a new job. ∙ Rita graduated from college and is currently looking for a job. ∙ Armondo quit his old job and will begin his new job in four days. ∙ Thorton was fired from his job as a steel worker because of massive imports of steel and he is looking for a new job. ∙ Jung was laid off from his job as an appraiser because the firm's business declined because of a general downturn in the economy and he is currently looking for a new job as an appraiser. According to the scenario above, in which of the following groups are all the people structurally unemployed? A) Jung B) Darrelo and Thorton C) Thorton and Darrelo D) Rita, Armondo, and Chris E) Thorton

Thorton

Which of the following is true? A) To be classified as employed, you must be a full-time worker at a paid job. B) If you are not working and turn down a job offer in the previous week, you are no longer classified as unemployed. C) To be classified as employed, you must work at least 20 hours per week at a paid job. D) Part-time workers are all those who work less than 40 hours per week. E) To be classified as employed, you must work at least 1 hour per week at a paid job or 15 hours or more as an unpaid worker in your family business.

To be classified as employed, you must work at least 1 hour per week at a paid job or 15 hours or more as an unpaid worker in your family business.

Suppose that Mel (who is 27) is not working, but looked for a job as recently as 2 months ago. Mel would like a job and he is available for work. He is considered A) a member of the labor force and unemployed. B) a marginally attached worker. C) a member of the labor force, but not unemployed. D) unemployed. E) a member of the working-age population

a marginally attached worker.

When the unemployment rate is ________ the natural unemployment rate, real GDP is ________ potential GDP. A) above; above B) the same as; above C) the same as; below D) below; above E) above; the same as

below; above

Cyclical unemployment includes people who become unemployed from A) changes in the seasons. B) technological changes. C) changes in the business cycle. D) normal labor market turnover. E) changes in international competition.

changes in the business cycle.

A reduction in unemployment benefits will A) increase the amount of frictional unemployment. B) increase the amount of cyclical unemployment. C) not change the amount of frictional unemployment because unemployment benefits affects only cyclical unemployment. D) decrease the amount of frictional unemployment. E) not change the amount of frictional unemployment because unemployment benefits affects only structural unemployment.

decrease the amount of frictional unemployment.

Jane is a 25 year old, full-time student. She works part time in her school library and is paid $7 an hour. She is considered to be A) unemployed. B) not in the working-age population because she is in college. C) in labor force but not working. D) not in labor force. E) employed.

employed.

Potential GDP is the level of output produced when the unemployment rate is A) greater than the natural unemployment rate. B) made up of only cyclical unemployment. C) less than the natural unemployment rate. D) equal to the natural unemployment rate. E) zero.

equal to the natural unemployment rate.

Natural unemployment equals the sum of A) business and cyclical unemployment. B) cyclical, business, and structural unemployment. C) frictional and structural unemployment. D) cyclical and frictional unemployment. E) cyclical and structural unemployment.

frictional and structural unemployment.

Bill just 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) not in the labor force. B) cyclically unemployed. C) structurally unemployed. D) frictionally unemployed. E) employed because he is visiting firms.

frictionally unemployed.

In the United States, over the past 50 years the total labor force participation rate A) has decreased. B) first decreased slightly and then increased significantly. C) has remained more or less constant. D) has increased. E) has fluctuated substantially.

has increased.

A marginally attached worker i. does not have a job and has not looked for one in the last month. ii. is available and willing to work. iii. must work at least 1 hour per week. A) ii only B) i only C) iii only D) i and ii E) ii and iii

i and ii

Which is true concerning U-2? i. It does not count marginally attached workers as unemployed. ii. It counts as unemployed workers who were laid off. iii. It is smaller than U-3. A) i and ii B) i only C) ii and iii D) i and iii E) i, ii and iii

i, ii, and iii

Discouraged workers are included in the calculation of the i. unemployment rate. ii. labor force participation rate. iii. working-age population. A) i only B) ii and iii C) ii only D) iii only E) i and ii

iii only

Between 1960 and 2010, the labor force participation rate for women A) increased until about 1996. B) did not change until 1992, after which it generally increased. C) did not change. D) first rose sharply and then, after 1996, fell equally sharply. E) decreased in most years.

increased until about 1996.

During a recession, cyclical unemployment ________ and real GDP ________. A) decreases; increases B) increases; increases C) decreases; decreases D) does not change; decreases E) increases; decreases

increases; decreases

The unemployment rate generally ________ during recessions and generally ________ during expansions. A) increases; increases B) decreases; increases C) increases; does not change D) increases; decreases E) decreases; decreases

increases; decreases

Part-time workers are defined as people who are working A) more than 10 hours per week. B) less than 35 hours per week. C) less than 20 hours per week. D) fewer hours than they would want. E) between 20 and 35 hours per week.

less than 35 hours per week.

In the United States, a reason for the increase of the labor force participation rate for women is that A) more women pursued a college education and received higher wages upon graduation. B) fewer women married. C) there has been a decrease in jobs with flexible hours. D) improved Social Security benefits are available for women if they work. E) an increase in wealth allowed men to retire early.

more women pursued a college education and received higher wages upon graduation.

Frictional unemployment is the result of A) the economy entering a strong expansion. B) a slowdown in the rate of economic expansion. C) normal labor market turnover. D) technological change or foreign competition. E) changes in the weather.

normal labor market turnover.

After graduating from college, Yunis, age 22, started working for his parents' real estate business as an unpaid assistant. He works 25 hours a week helping manage rental units. In the Current Population Survey, Yunis is considered A) part of the labor force and employed. B) a discouraged worker. C) not part of the labor force. D) part of the labor force and unemployed. E) part of the labor force but not part of the working-age population.

part of the labor force and employed.

The Bureau of Labor Statistics (BLS) compiles information about employment by A) performing a quarterly survey 6,000,000 households. B) contacting each of the 50 states' Departments of Labor. C) performing a monthly survey of 60,000 households. D) performing a census of every household in the nation. E) determining the average estimate of labor market specialists around the nation.

performing a monthly survey of 60,000 households.

During a recession, A) real GDP is greater than potential GDP. B) the relationship between real GDP and potential GDP no longer exists. C) the actual unemployment rate is less than the natural unemployment rate. D) real GDP is equal to potential GDP. E) real GDP is less than potential GDP.

real GDP is less than potential GDP.

Which type of unemployment arises when changes in technology or international competition change the skills needed to perform jobs or change the location of jobs? A) fluctuating B) structural C) frictional D) skill-set E) cyclical

structural

The labor force consists of A) the number of people who are employed. B) all people in the population aged 16 and over who are not in jail, a hospital, or an institution or in the U.S. Armed Forces. C) the number of people in the working-age population who are employed or unemployed. D) the number of people who unemployed and who are actively seeking work. E) the number of people who are employed minus the number of the people who are unemployed.

the number of people in the working-age population who are employed or unemployed.

When the economy is at full employment, A) 100 percent of the labor force is employed. B) there is no cyclical unemployment. C) there is only frictional unemployment. D) there is no structural or cyclical unemployment. E) the natural unemployment rate equals zero.

there is no cyclical unemployment.

Full employment occurs when the A) natural unemployment rate equals the frictional unemployment rate. B) structural unemployment rate equals zero. C) structural unemployment rate equals the frictional unemployment rate. D) cyclical unemployment rate equals the natural unemployment rate. E) unemployment rate equals the natural unemployment rate.

unemployment rate equals the natural unemployment rate.

At the peak of a business cycle, the A) natural unemployment rate is negative. B) unemployment rate is above the natural unemployment rate. C) unemployment rate is below the natural unemployment rate. D) frictional unemployment rate is zero. E) cyclical unemployment rate is positive.

unemployment rate is below the natural unemployment rate.

Involuntary part-time workers are workers who A) work less than 35 hours but would like to work full time. B) work have lost their jobs within the last four weeks and are seeking another job. C) have withdrawn from the labor market. D) work more than 35 hours but would like to work less than 35 hours. E) work less than 35 hours by choice.

work less than 35 hours but would like to work full time.

The labor force participation rate is equal to A) (number of employed workers ÷ working-age population) × 100. B) (labor force ÷ population) × 100. C) (number of employed workers ÷ population) × 100. D) (labor force ÷ working-age population) × 100. E) (number of employed workers ÷ labor force) × 100.

(labor force ÷ working-age population) × 100.

The highest unemployment rate in U.S. history was about A) 10 percent in 1982. B) 10.2 percent in 2009. C) 25 percent in 1933. D) 5.9 percent in 1972. E) 52 percent in 1939.

25 percent in 1933.

Suppose the working-age population is 500 million, the labor force is 200 million, and the unemployment rate is 15 percent. The number of unemployed people is A) 75 million. B) 30 million. C) 45 million. D) 105 million. E) 15 million.

30 million

Consider the following people: ∙ Chris quits his job as an automobile mechanic to pursue his college education full-time. ∙ Darrelo was laid off from her technical support job because of a strike by production workers and is currently looking for a new job. ∙ Rita graduated from college and is currently looking for a job. ∙ Armondo quit his old job and will begin his new job in four days. ∙ Thorton was fired from his job as a steel worker because of massive imports of steel and he is looking for a new job. ∙ Jung was laid off from his job as an appraiser because the firm's business declined because of a general downturn in the economy and he is currently looking for a new job as an appraiser. According to the scenario above, in which of the following groups are all the people cyclically unemployed? A) Jung B) Darrelo C) Thorton D) Jung and Thorton E) Jung and Rita

Jung

Which of the following people would be classified as employed in the Current Population Survey? A) Misty, who just quit her job to return full time to school B) April, who just graduated from college and is looking for work C) Laura, who is unpaid but is working 10 hours a week in the family business she and her husband run D) Rich, who is working 20 hours a week but wants a full-time job E) Jason, who was laid off from work less than 6 months ago but who has stopped looking for work

Rich, who is working 20 hours a week but wants a full-time job

Consider the following people: ∙ Chris quits his job as an automobile mechanic to pursue his college education full-time. ∙ Darrelo was laid off from her technical support job because of a strike by production workers and is currently looking for a new job. ∙ Rita graduated from college and is currently looking for a job. ∙ Armondo quit his old job and will begin his new job in four days. ∙ Thorton was fired from his job as a steel worker because of massive imports of steel and he is looking for a new job. ∙ Jung was laid off from his job as an appraiser because the firm's business declined because of a general downturn in the economy and he is currently looking for a new job as an appraiser. According to the scenario above, in which of the following groups are all the people frictionally unemployed? A) Darrelo and Jung B) Rita and Darrelo C) Chris, Rita, and Thorton D) Jung E) Rita and Jung

Rita and Darrelo