ECO 202 QUIZ 11

Suppose the United States enters a recession, what type of unemployment would be most likely to rise as a result of the recession?

cyclical unemployment

How would the U.S. Bureau of Labor Statistics classify a 20-year old individual enrolled in college full-time and working 5 hours per week in the campus bookstore?

employed

The "efficiency wage" theory states that ...

employers can motivate employees by paying them more than the prevailing wage.

In order to calculate the unemployment rate, the U.S. Bureau of Labor Statistics needs to know how many people are not in the labor force.

false

Labor union membership in the United States peaked in the 1990s.

false

The "efficiency wage" theory states that wages should be set with short-term contracts to allow for flexibility as market conditions vary.

false

The NAIRU is the maximum rate of unemployment that avoids a recession.

false

The increased flexibility in working arrangements in the United States has been a result of the advocacy of labor unions.

false

The majority of people in the United States are classified as "not in the labor force" according to the U.S. Bureau of Labor Statistics.

false

Unemployment data suggest that the natural rate of unemployment has stayed remarkably constant in the United States over the last few decades.

false

What type of unemployment would prevent the unemployment rate from falling to zero, even in a very good job market?

frictional employment

Considering the various types of unemployment discussed in the text, which type of unemployment is LEAST likely to be affected by government policies?

frictional unemployement

Over the last several decades in the United States labor force participation rates ...

have generally decreased for men but increased for women.

The introduction of compact discs made vinyl records obsolete. To the extent this caused higher unemployment among workers who had manufactured records, which type of unemployment was created?

structural unemployement

The NAIRU is defined as ...

the lowest rate of unemployment that avoids an overheated economy.

"Discouraged" workers are a subset of those workers classified as not in the labor force by the U.S. Bureau of Labor Statistics.

true

A 15-year old who delivers newspapers a few mornings per week would not be classified as being in the labor force according to the U.S. Bureau of Labor Statistics.

true

Over the last several decades in the United States the labor force participation rate for men has decreased while the rate for women has increased.

true

Someone who is working fewer hours at a job than they would prefer to work is considered underemployed.

true

Suppose that the widespread use of DVDs has resulted in increased unemployment among those who repair obsolete VCR players. This is an example of structural unemployment.

true

The "efficiency wage" theory states that employers can motivate employees by paying them more than the prevailing wage.

true

The "insider-outsider" theory states that workers already employed with a firm can keep their wages artificially high by limiting the firm's ability to hire new workers or the productivity of new workers.

true

The "sticky wage" theory states that ...

wages may stay at above-equilibrium levels for an extended period of time, thus keeping unemployment high.

Suppose the U.S. Bureau of Labor Statistics classifies 135 million people as employed and the unemployment rate is 10%. How many people are in the labor force in this example?

150 million

Which one of the following statements is TRUE?

Data on unemployment suggest that if there is a natural rate of unemployment, it has varied over time.

The U.S. Bureau of Labor Statistics bases its unemployment statistics on what population?

All civilian, non-institutionalized people over age 16

What is the traditional definition of a recession according to the National Bureau of Economic Research?

GDP falls for two consecutive quarters

Which one of the following statements is TRUE?

Over the last few decades in the United States the percentage of workers working more than 50 hours per week and fewer than 30 hours per week have both increased.

Which one of the following people would NOT be classified as unemployed according to the U.S. Bureau of Labor Statistics?

Someone working 20 hours per week in a family business but is not being paid.

What is the main policy implication of applying the Classical model to the labor market?

The government should limit regulations and social programs in order to increase the efficiency of the market.

Which one of the following categories defined by the U.S. Bureau of Labor Statistics contains the fewest number of people?

Unemployed individuals

According to the Classical labor market model, a minimum wage above the equilibrium wage will result in ...

an increase in unemployment

Someone experiencing "frictional unemployment" is someone who ...

is temporarily between jobs

Suppose a 50-year old, non-institutionalized civilian is not looking for a job, and is considered by the U.S. Bureau of Labor Statistics to be a "discouraged worker". Which other BLS category would this person belong to?

not in the labor force