Ch 15

In 2018 the Bureau of Labor Statistics reported that there were 57.4 million people over age 25 whose highest level of education was some college or an associate degree. Of these, 36.3 million were employed and 1.2 million were unemployed. What were the labor-force participation rate and the unemployment rate for this group?

65.3% and 3.2%

Gwen is an unpaid worker in her family's restaurant. The Bureau of Labor Statistics counts Gwen as

a. employed and in the labor force.

The natural rate of unemployment is the

amount of unemployment that the economy normally experiences

Which of the following is an explanation for the existence of frictional unemployment?

b. Job search

Octavia does not currently have a job, but she has applied for several jobs in the previous week. Eve is an unpaid stay-at-home mom who has not searched for work in recent years. Who does the Bureau of Labor Statistics count as "not in the labor force"?

d. Eve but not Octavia

Suppose that a large number of people who used to work or seek work no longer do either. Other things the same, this makes

d. both the number of people unemployed and in the labor force fall.

Sam has no job but keeps applying to get a job with a business that is unionized. He is qualified and he finds the pay attractive, but the firm is not hiring. Sam is

d. structurally unemployed. Structural unemployment exists even in the long run.

Efficiency wages

increase productivity but increase unemployment.

Cyclical unemployment refers to

short-run fluctuations around the natural rate of unemployment

Minimum wages create unemployment in markets where they create a

surplus of labor. Unemployment of this type is called structural.