Economics Chapter 6

If the number of employed people is 150 million, the number of unemployed people is 50 million, and the working-age population equals 285 million people, the labor force participation rate is a) 25 percent b) 81 percent c) 52.6 percent d) 70.2 percent e) 17.5 percent

70.2 percent

In the United States, over the past 50 years the total labor force participation rate a) has fluctuated substantially. b) has remained more or less constant. c) has increased. d) first decreased slightly and then increased significantly. e) has decreased.

has increased

A marginally attached worker i. does not have a job and has not looked for one in the last month. ii. is available and willing to work. iii. must work at least 1 hour per week. a) i only b) iii only c) ii and iii d) i and ii e) ii only

i and ii

Which is true concerning U-2? i. It does not count marginally attached workers as unemployed. ii. It counts as unemployed workers who were laid off. iii. It is smaller than U-3. a) i and iii b) i only c) i and ii d) i, ii and iii e) ii and iii

i, ii, and iii

Which type of unemployment arises when changes in technology or international competition change the skills needed to perform jobs or change the location of jobs? a) skill-set b) fluctuating c) structural d) frictional e) cyclical

structural

Full employment occurs when the a) structural unemployment rate equals the frictional unemployment rate. b) natural unemployment rate equals the frictional unemployment rate. c) cyclical unemployment rate equals the natural unemployment rate. d) structural unemployment rate equals zero. e) unemployment rate equals the natural unemployment rate.

unemployment rate equals the natural unemployment rate

The labor force participation rate is equal to a) (number of employed workers ÷ working-age population) × 100. b) (labor force ÷ population) × 100. c) (number of employed workers ÷ population) × 100. d) (number of employed workers ÷ labor force) × 100. e) (labor force ÷ working-age population) × 100.

(labor force ÷ working-age population) × 100.

The highest unemployment rate in U.S. history was about a) 25 percent in 1933. b) 10.2 percent in 2009. c) 5.9 percent in 1972. d) 52 percent in 1939. e) 10 percent in 1982.

25 percent in 1933

Suppose the working-age population is 500 million, the labor force is 200 million, and the unemployment rate is 15 percent. The number of unemployed people is a) 30 million b) 75 million c) 15 million d) 105 million e) 45

30 million

The average U.S. unemployment rate from 1948 has been about a) 10.7 percent b) 5.8 percent c) 2.7 percent d) 15.7 percent e) 19.7 percent

5.8 percent

Consider the following people: ∙ Chris quits his job as an automobile mechanic to pursue his college education full-time. ∙ Darrelo was laid off from her technical support job because of a strike by production workers and is currently looking for a new job. ∙ Rita graduated from college and is currently looking for a job. ∙ Armondo quit his old job and will begin his new job in four days. ∙ Thorton was fired from his job as a steel worker because of massive imports of steel and he is looking for a new job. ∙ Jung was laid off from his job as an appraiser because the firm's business declined because of a general downturn in the economy and he is currently looking for a new job as an appraiser. According to the scenario above, in which of the following groups are all the people cyclically unemployed? a) Thorton b) Jung and Rita c) Jung d) Darrelo e) Jung and Thorton

Jung

Which of the following people would be classified as employed in the Current Population Survey? a)Jason, who was laid off from work less than 6 months ago but who has stopped looking for work b) Laura, who is unpaid but is working 10 hours a week in the family business she and her husband run c) Rich, who is working 20 hours a week but wants a full-time job d) Misty, who just quit her job to return full time to school e) April, who just graduated from college and is looking for work

Rich, who is working 20 hours a week but wants a full-time job

Consider the following people: ∙ Chris quits his job as an automobile mechanic to pursue his college education full-time. ∙ Darrelo was laid off from her technical support job because of a strike by production workers and is currently looking for a new job. ∙ Rita graduated from college and is currently looking for a job. ∙ Armondo quit his old job and will begin his new job in four days. ∙ Thorton was fired from his job as a steel worker because of massive imports of steel and he is looking for a new job. ∙ Jung was laid off from his job as an appraiser because the firm's business declined because of a general downturn in the economy and he is currently looking for a new job as an appraiser. According to the scenario above, in which of the following groups are all the people frictionally unemployed? a) Chris, Rita, and Thorton b) Darrelo and Jung c) Rita and Jung d) Rita and Darrelo e) Jung

Rita and Darrelo

Consider the following people: ∙ Chris quits his job as an automobile mechanic to pursue his college education full-time. ∙ Darrelo was laid off from her technical support job because of a strike by production workers and is currently looking for a new job. ∙ Rita graduated from college and is currently looking for a job. ∙ Armondo quit his old job and will begin his new job in four days. ∙ Thorton was fired from his job as a steel worker because of massive imports of steel and he is looking for a new job. ∙ Jung was laid off from his job as an appraiser because the firm's business declined because of a general downturn in the economy and he is currently looking for a new job as an appraiser. According to the scenario above, in which of the following groups are all the people structurally unemployed? a) Darrelo and Thorton b) Thorton c) Jung Rita, Armondo, and Chris Thorton and Darrelo

Thorton

Which of the following is true? a)To be classified as employed, you must work at least 20 hours per week at a paid job. b) To be classified as employed, you must be a full-time worker at a paid job. c) Part-time workers are all those who work less than 40 hours per week. d) f you are not working and turn down a job offer in the previous week, you are no longer classified as unemployed. e) To be classified as employed, you must work at least 1 hour per week at a paid job or 15 hours or more as an unpaid worker in your family business.

To be classified as employed, you must work at least 1 hour per week at a paid job or 15 hours or more as an unpaid worker in your family business.

Suppose that Mel (who is 27) is not working, but looked for a job as recently as 2 months ago. Mel would like a job and he is available for work. He is considered a) a member of the labor force, but not unemployed. b) a member of the working-age population c) unemployed. d) a member of the labor force and unemployed e) a marginally attached worker

a marginally attached worker

When the unemployment rate is ________ the natural unemployment rate, real GDP is ________ potential GDP. a) the same as; above b) above; the same as c) the same as; below d) below; above e) above; above

below; above

Cyclical unemployment includes people who become unemployed from a) changes in international competition. b) normal labor market turnover. c) technological changes. d) changes in the business cycle. e) changes in the seasons.

changes in the business cycle

A reduction in unemployment benefits will a) not change the amount of frictional unemployment because unemployment benefits affects only cyclical unemployment. b) increase the amount of cyclical unemployment. c) not change the amount of frictional unemployment because unemployment benefits affects only structural unemployment. d) decrease the amount of frictional unemployment. e) increase the amount of frictional unemployment.

decrease the amount of frictional unemployment

Jane is a 25 year old, full-time student. She works part time in her school library and is paid $7 an hour. She is considered to be a) employed b) unemployed c) in labor force but not working d) not in labor force but not working e) not in the working-age population because she is in college

employed

Potential GDP is the level of output produced when the unemployment rate is a) greater than the natural unemployment rate. b) zero. c) equal to the natural unemployment rate. d) made up of only cyclical unemployment. e) less than the natural unemployment rate.

equal to the natural unemployment rate

Natural unemployment equals the sum of a) business and cyclical unemployment. b) cyclical and frictional unemployment. c) frictional and structural unemployment. d) cyclical, business, and structural unemployment. e) cyclical and structural unemployment.

frictional and structural unemployment

Bill just 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 a) not in the labor force. b) employed because he is visiting firms. c) cyclically unemployed. d) frictionally unemployed. e) structurally unemployed

frictionally unemployed

Discouraged workers are included in the calculation of the i. unemployment rate. ii. labor force participation rate. iii. working-age population. a) i only b) i and ii c) ii only d) ii and iii e) iii only

iii only

Between 1960 and 2010, the labor force participation rate for women a) increased until about 1996. b) did not change until 1992, after which it generally increased. c) did not change. d) first rose sharply and then, after 1996, fell equally sharply. e) decreased in most years.

increased until about 1996

The unemployment rate generally ________ during recessions and generally ________ during expansions a) decreases; decreases b) increases; does not change c) increases; decreases d) increases; increases e) decreases; increases

increases; decrease

During a recession, cyclical unemployment ________ and real GDP ________. a) decreases; decreases b) increases; increases c) decreases; increases d) does not change; decreases e) increases; decreases

increases; decreases

Part-time workers are defined as people who are working a) more than 10 hours per week. b) less than 20 hours per week c) less than 35 hours per week. d) fewer hours than they would want. e) between 20 and 35 hours per week.

less than 35 hours per week

In the United States, a reason for the increase of the labor force participation rate for women is that a) an increase in wealth allowed men to retire early. b) improved Social Security benefits are available for women if they work. c) more women pursued a college education and received higher wages upon graduation. d) there has been a decrease in jobs with flexible hours. e) fewer women married.

more women pursued a college education and received higher wages upon graduation

Frictional unemployment is the result of a) a slowdown in the rate of economic expansion. b) changes in the weather. c) normal labor market turnover. d) the economy entering a strong expansion. e) technological change or foreign competition.

normal labor market turnover

After graduating from college, Yunis, age 22, started working for his parents' real estate business as an unpaid assistant. He works 25 hours a week helping manage rental units. In the Current Population Survey, Yunis is considered a) part of the labor force but not part of the working-age population. b)a discouraged worker. c) not part of the labor force. d) part of the labor force and employed. e) part of the labor force and unemployed

part of the labor force and employed

The Bureau of Labor Statistics (BLS) compiles information about employment by a)determining the average estimate of labor market b)specialists around the nation. c)performing a census of every household in the nation. d)performing a quarterly survey 6,000,000 households. e)performing a monthly survey of 60,000 households. f)contacting each of the 50 states' Departments of Labor.

performing a monthly survey of 60,000 households.

During a recession, a) the actual unemployment rate is less than the natural unemployment rate. b) real GDP is greater than potential GDP. c) real GDP is equal to potential GDP. d) the relationship between real GDP and potential GDP no longer exists. e) real GDP is less than potential GDP

real GDP is less than potential GDP

The labor force consists of a) all people in the population aged 16 and over who are not in jail, a hospital, or an institution or in the US Armed Froces b) the number of people in the working-age population who are employed or unemployed c) the number of people who are employed d) the number of people who are employed minus the number of the people who are unemployed e) the number of people who are unemployed and who are actively seeking work

the number of people in the working-age population who are employed or unemployed.

When the economy is at full employment, a) the natural unemployment rate equals zero. b) there is only frictional unemployment. c) there is no structural or cyclical unemployment. d) 100 percent of the labor force is employed. e) there is no cyclical unemployment.

there is no cyclical unemployment

At the peak of a business cycle, the a) unemployment rate is above the natural unemployment rate. b) natural unemployment rate is negative. c) unemployment rate is below the natural unemployment rate. d) frictional unemployment rate is zero. e) cyclical unemployment rate is positive.

unemployment rate is below the natural unemployment rate

Involuntary part-time workers are workers who a) work have lost their jobs within the last four weeks and are seeking another job. b) work more than 35 hours but would like to work less than 35 hours. c) have withdrawn from the labor market. d) work less than 35 hours by choice. e) work less than 35 hours but would like to work full time

work less than 35 hours but would like to work full time