chapter 8 unemployment quiz

If an unemployed person quits looking for work, then, eventually the unemployment rate

and the labor force participation rate decrease

Evidence from research studies by economists

shows that increased unemployment benefits decrease the job search efforts of the unemployed.

structural unemployment

unemployment that occurs when workers' skills do not match the jobs that are available

cyclical unemployment

year-to-year fluctuations of unemployment around its natural rate

Efficiency wages

increase productivity but increase unemployment

frictional unemployment

A type of unemployment caused by workers voluntarily changing jobs and by temporary layoffs; unemployed workers between jobs.

An economist claims that changes in information technology and unemployment insurance have reduced unemployment. Which of these changes affect frictional unemployment?

both do

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

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

An increase in the minimum wage

increases structural unemployment

suppose that garbage collectors and landscaper workers have no unions. Now suppose that garbage collectors form unions. What does this do to landscaping workers?

labor supply increases, and wages decrease

Minimum wages create unemployment in markets where they create a

surplus of labor. (structural unemployment)

in the long run the unemployment rate equals

the natural rate of unemployment