Macroeconomics CH 9
Employers choose to offer efficiency wages because
(all of these are true) It will reduce turnover, saving the employer time and money to cure and train new workers; it has proven to make workers more productive; they give employees an incentive to work hard to keep their jobs.
An increase in frictional unemployment will result in
(more than one are true) An increase in structural unemployment; a decrease in the natural rate of unemployment; a decrease in cyclical unemployment; a decrease in cyclical unemployment; an increase in the unemployment rate.
In January of 2001, the population of the United States was 276.8 million, the working-age population was 210.2 million, the total number of people "employed" and "unemployment was 145.0 million, and the total number of unemployment people was 5.5 million. What was the unemployment rate?
3.8%
If the number of unemployed workers is 19 million, the number in the working-age population is 500 million, and the unemployment rate is 4%, how many workers are in the labor force?
475 million
If the number of unemployed workers is 30 million, the number in the working-age population is 500 million, and the unemployment rate is 10%, what is the labor force participation rate?
60%
If the number of unemployment workers is 50 million, the number in the working-age population is 500 million, and the unemployment rate is 12.5%, what is the labor force participation rate?
80%
If the number if unemployment workers is 19 million, the number in the working-age population is 500 million, and the unemployment rate is 4%, what is the labor force participation rate?
95%
Which of the following is an example of a worker experiencing cyclical unemployment?
A Freightliner employee that got laid off because of the recession of 2001
Suppose that 100 people that were officially classified as "unemployed" quit looking for work in order to go back to school full-time. This change will cause
a decrease in the unemployment rate and a decrease in the labor force participation rate.
Minimum wage laws cause unemployment because the legal minimum wage is set
above the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied.
Wages that are above the wage that workers would be willing to accept, where the premium is paid to increase worker productivity, are referred to as
efficiency wages.
We don't typically see wages _ in response to an economic downturn because _.
fall; they are "sticky" and are slow to respond to shifts in the economy
Ameer just quit his job as a show salesman and is looking for work as an accountant, which is what his college degree is in. Ameer would be considered
frictional unemployed
The advice to "keep searching, there are plenty of jobs around here for which you are qualified," would be most appropriate for which of the following types of unemployment?
frictional unemployment
Establishing a state employment agency that speeds up the process of matching unemployed workers with unfilled jobs is an attempt to lower
frictional unemployment.
Rosina Gonzales quit her job in Pennsylvania and moved to California to be close to her family. She is currently looking for work, so she would be considered
frictionally unemployed
Bill has 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
frictionally unemployed.
An increase in the minimum wage causes the quantity supplied of labor to _, the quantity demanded of labor _, and this causes a _ of labor.
increase; decrease; surplus
In a recession, the number of "discouraged workers" is likely to _. Thus, the actual unemployment situation is likely _ the official unemployment numbers tell us during the recession.
increase; worse than
The labor demand curve
is provided by firms who want to hire workers at each given wage.
The trade-offs in the effect of unemployment insurance are
it prolongs the job search, but reduce the number of job searches a person has to make.
We would expect that policies to protect workers would
lead to greater unemployment
Policies that make it more difficult to fire an employee are likely to
lead to greater unemployment.
The natural rate of unemployment means that
only frictional, structural, and classical (real-wage) unemployment exist.
The natural rate of unemployment means that
only frictional, structural, and classical unemployment exist.
Discourage workers are classified by the BLS as
out of the labor force.
Discouraged workers are classified by the BLS as
out of the labor force.
The labor supply curve
shows that, all things being equal, more workers will want to work when wages are higher and less will want to work when wages are lower.
In general, economists believe that the measured unemployment rate _ the actual amount of joblessness in the economy.
understates
When growth goes down, unemployment tends to go
up shortly after, and vice versa.
Which of the following is correct?
Adults not in the labor force = adult population - employment workers - unemployed workers
Which of the following has a tendency to raise the unemployment rate?
An assembly line worker who loses his job because of automation.
Members of the military are currently not included in the employment, labor force , and working-age population statistics. What impact would including members of the military in these statistics have on the unemployment rate and the labor force participation rate?
Including members of the military would reduce both the unemployment rate and increase the labor force participation rate.
Suppose that you suspect that the number of "discouraged workers" has increased over the last year. Which of the following pieces of information would be support your suspicion?
The labor force participation rate has fallen over the last year.
Which of the following causes the unemployment rate to overstate the true extent of joblessness?
A drug dealer reports herself as unemployed.
Which of the following is not the result of wage stickiness in an economy downturn?
A shortage of labor.
An economic slow-down would cause the labor
demand curve to shift left.
For which types of unemployment is it possible that the number of available workers and the number of available jobs are equal?
Both frictional and structural unemployment.
If there is frictional unemployment, then the number of available jobs is _ the number of available workers.
Both less than and equal to
Which of the following has a tendency to reduce the unemployment rate?
Decrease unemployment insurance in an economy.
Which of the following explains why frictional unemployment exists in an economy?
It arises because it takes time for an unemployment worker to find a firm with a well-matched job vacancy.
Which of the following causes the unemployment rate to overstate the true extent of joblessness?
More than one of the above cause the unemployment rate to overstate the true extent of joblessness.
Sarah is a full-time student who is not looking for work. What kind of unemployment is Sarah experiencing?
Sarah is not experiencing unemployment of any kind because she is not currently part of the labor force.
People who lost their job as hand-drawn animators because of the population of computer-generated 3D animation are examples of persons who are suffering
Structural unemployment
Which of the following statements correctly differentiates between unemployed workers and discouraged workers?
Unemployed workers are counted in the labor force, but discouraged workers are excluded from the labor force.
An increase in cyclical unemployment will result in
an increase in the unemployment rate.
Economists say that the economy is at "the natural rate of unemployment" when
cyclical unemployment is zero.
The demand for refrigerator falls when the economy enters a downturn. If a refrigerator manufacturer lays off workers during an economic downturn, this would be an example of
cyclical unemployment.
Suppose that an economy moves from a recession to an expansion. As the economy improves, the number of discouraged workers likely _. This change in the number of discouraged workers, other things equal, cause the unemployment rate to _.
decrease; increase
How would you best describe a manufacturing employee who has been fired because he was replaced by a robot and does not have the skills necessary to help operate the robot?
structurally unemployed
If the working age population in an economy increases, while the size of the labor force rains unchanged, _.
the labor force participation rate will fall