Macroeconomics Chapter 8

The U.S. unemployment rate moves up and down as the economy moves in and out of recessions. But over time, the unemployment rate seems to return to a range of ____________.

4%-6%

Craigburg has a working age population of 20 million. Of those, 11 million are employed and 1 million are unemployed. The unemployment rate is ________ and the participation rate is __________.

8.3%; 60%.

A welder who quits his job and moves from Pittsburgh to Madison to try to get a better welding job is said to be:

Frictionally Unemployed

When the unemployment rate is lower than the natural unemployment rate, real GDP is

Greater than potential GDP

Insofar as government public policy is concerned, the best way to battle unemployment would be __________________.

To minimize recessions

In November 2010 the labor force in Siouxtown, was 14,800. There were 14,483 persons employed. The local unemployment rate:

Was 2.1%

When the economy is at full employment, the

natural unemployment rate equals the unemployment rate.

After 15 years with Ford Motor Corporation, one summer Cameron loses his job. His boss explained that his position has been downsized after the technological advances in automobile production. Cameron is best considered

structurally unemployed.

If a nation's labor force receives a significant influx of young workers:

the natural rate of unemployment is likely to increase.

The unemployment rate measures

unemployed workers as a percentage of the labor force

Frictional Unemployment is

unemployment that is due to normal turnover in the labor market.

The _________________ argument points out that if an employer reacts to poor business conditions by reducing pay for all workers, then the best workers, with the best employment alternatives at other firms, are the most likely to leave and the least-attractive workers, with fewer employment alternatives, are more likely to stay.

Adverse selection of wage cuts

The natural unemployment rate is the unemployment rate that exists when there is no

Cyclical Unemployment

The type of unemployment that occurs because of a recession is called:

Cyclical Unemployment

Which type of unemployment is a permanent and healthy phenomenon in a dynamic economy?

Frictional

The development of a nationwide computerized job bank listing of all job openings would be most likely to reduce:

Frictional Unemployment

The extent of _______________________ will depend on how easy it is for workers to learn about alternative jobs, which may reflect the ease of communications about job prospects in the economy.

Frictional Unemployment

The unemployment rate may underestimate the true extent of unemployment if

Many part-time employees would like to work fulltime, but are unable to get the additional work.

Reginald looked for work for six months but could not find a job to his liking. He now spends his time at the beach. For purposes of employment he is considered:

Out of the Labor Force

The most significant real economic cost of high unemployment is

The potential goods and services that might have been produced but weren't

The Natural Unemployment Rate

includes only frictional and structural unemployment.

In 2011, real GDP in the United States was below potential GDP. This fact definitely means that

the unemployment rate was above the natural unemployment rate.