Macro chapter 28

If an unemployed person quits looking for work, then, eventually the unemployment rate Select one: a. decreases, and the labor-force participation rate is unaffected. b. and the labor-force participation rate both decrease. c. is unaffected, and the labor-force participation rate decreases. d. and the labor-force participation rate are both unaffected.

b

Suppose that the Bureau of Labor Statistics reports that the entire adult population of Mankiwland can be categorized as follows: 25 million people employed, 3 million people unemployed, 1 million discouraged workers, and 1 million people who are either students, homemakers, retirees, or other people not seeking employment. Refer to Scenario 28-1. What is the total labor force? Select one: a. 25 million b. 28 million c. 29 million d. 30 million

b

Unions contribute to Select one: a. frictional but not structural unemployment. b. structural but not frictional unemployment. c. both frictional and structural unemployment. d. neither frictional nor structural unemployment.

b

Frictional unemployment results from Select one: a. job searching. It is often thought to explain relatively short spells of unemployment. b. job searching. It is often thought to explain relatively long spells of unemployment c. a surplus in the some labor markets. It is often thought to explain relatively short spells of unemployment. d. a surplus in some labor markets. It is often thought to explain relatively long spells of unemployment.

a

If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7 percent, then by definition there is Select one: a. cyclical unemployment amounting to 0.5 percent of the labor force. b. frictional unemployment amounting to 0.5 percent of the labor force. c. structural unemployment amounting to 0.5 percent of the labor force. d. search unemployment amounting to 0.5 percent of the labor force.

a

Policies that reduce the time it takes unemployed workers to find new jobs Select one: a. can reduce both frictional unemployment and the natural rate of unemployment. b. can reduce frictional unemployment, but they cannot reduce the natural rate of unemployment. c. cannot reduce frictional unemployment, but they can reduce the natural rate of unemployment. d. cannot reduce either frictional unemployment or the natural rate of unemployment.

a

Suppose that the adult population in the town of Springfield is 225 million. If 40 million are unemployed and 100 million are employed, then the unemployment rate is approximately Select one: a. 29%. b. 18%. c. 24%. d. 6%.

a

Unemployment insurance Select one: a. reduces search effort which raises unemployment. b. reduces search effort which lowers unemployment. c. increases search effort which raises unemployment. d. increases search effort which decreases unemployment.

a

An increase in the minimum wage Select one: a. reduces structural unemployment. b. reduces frictional unemployment, c. increases structural unemployment. d. increases frictional unemployment.

c

Frictional unemployment is thought to explain relatively Select one: a. short spells of unemployment, as is structural unemployment. b. long spells of unemployment, as is structural unemployment. c. short spells of unemployment, while structural unemployment is thought to explain relatively long spells of unemployment. d. long spells of unemployment, while structural unemployment is thought to explain relatively short spells of unemployment.

c

Most spells of unemployment are Select one: a. long, and most unemployment observed at any given time is long term. b. long, but most unemployment observed at any given time is short term. c. short, but most unemployment observed at any given time is long term. d. short, and most unemployment observed at any given time is short term.

c

Suppose that the Bureau of Labor Statistics reports that the entire adult population of Mankiwland can be categorized as follows: 25 million people employed, 3 million people unemployed, 1 million discouraged workers, and 1 million people who are either students, homemakers, retirees, or other people not seeking employment. Refer to Scenario 28-1. What is the unemployment rate? Select one: a. 3.3% b. 6.7% c. 10.7% d. 12%

c

A firm may pay efficiency wages in an attempt to Select one: a. reduce incentives to shirk. b. reduce turnover. c. attract a well-qualified pool of applicants. d. All of the above are correct.

d

Collective bargaining refers to Select one: a. the process by which the government sets exemptions from the minimum wage law. b. setting the same wage for all employees to prevent conflict among workers. c. firms colluding to set the wages of employees below equilibrium. d. the process by which unions and firms agree on the terms of employment.

d

Cyclical unemployment is caused by Select one: a. frictional and structural unemployment b. frictional but not structural unemployment c. structural but not frictional unemployment d. neither frictional nor structural unemployment

d