Chapter 30 macro

(Table: Unemployment Statistics for Country X) Using the data in the table, Country X is likely to be in a recession in:

both 1995 and 2005

minimum wage is

labor market price floor

(Table: Unemployment Statistics for Country X) Using the data in the table, what is the natural unemployment rate for this country in the year 2005?

2.9%

(Figure: Labor Market) Refer to the figure. If this market is initially in equilibrium when a $10 minimum wage is imposed, the quantity of labor employed will fall by:

20

(Figure: Labor Supply and Demand) Refer to the figure. What is the unemployment rate caused by the labor union's action to increase its wage demands to $11 an hour?

40%

(Table: Employment, Unemployment, and Labor Force Participation) Refer to the table. What is the unemployment rate of the country in 2010?

5%

(Figure: Labor Market) Refer to the figure. What is the unemployment rate in this market as a result of the implementation of a $10 minimum wage?

50%

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. What is this country's underemployment rate?

60%

A country has a population of 160 million. Thirty million of its people are under the age of 16 and 10% of the population is either in the military or institutionalized. Seventy million people have jobs, and five million are looking for work. What is the labor force participation rate in this country?

66%

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. What is this country's labor force participation rate?

66.7%

(Table: Labor Data) According to the accompanying labor data, the unemployment rate is:

7.5%

(Figure: Labor Supply and Demand) Refer to the figure. How much will the quantity of labor employed decline as a result of the labor union's action to increase its wage demands to $11 an hour?

700

If the adult population of a country is 200 million, 100 million are employed, and 10 million are unemployed, this country's unemployment rate is:

9.1%

In a country where both the labor force participation rate and the unemployment rate are very low, which of the following answers explains why this may be the case?

A large percentage of the population is aging and thus has retired.

Consider countries A and B. In country A the minimum wage is 30% of the median wage, and in country B the minimum wage is 60% of the median wage. As a result, the minimum wage will affect more workers in country _____ and create more unemployment in country _____.

B ; B

Which of the following is true of the natural unemployment rate?

CorrectB. It is higher if structural or frictional unemployment is higher.

Which two nations have a high percentage of older workers participating in the labor force?

CorrectB. Japan and the United States

Which of the following is NOT true regarding the natural rate of unemployment?

CorrectB. The natural rate of unemployment correlates positively with the level of GDP growth in an economy.

According to the textbook, one major reason for the increase in the female labor force participation rate after World War II was:

CorrectB. an increase in the incentive to work.

Several years ago, the rising popularity of Barnes & Noble and Borders shifted workers from independent bookshops to larger chains. What type of unemployment was associated with this reallocation of the work force?

CorrectB. frictional unemployment

The implicit tax on working is less than 1% in the United States and over 2% in Belgium. Given this, we would expect:

CorrectB. higher labor force participation in the United States.

Structural unemployment is more persistent in France than in the United States because:

CorrectC. French workers have less incentive to quickly seek a new position since their unemployment benefits are much higher.

Which of the following is a case of cyclical unemployment?

CorrectC. Garrett lost his job after the company closed during last year's recession.

Which of the following is the best example of frictional unemployment?

CorrectC. Heather recently graduated with her doctorate in economics. She is searching for a job that matches her skills.

How might changes in marginal tax rates on married couples affect labor force participation rates?

CorrectC. Lower marginal tax rates on married couples encourage higher labor force participation rates by the secondary income earner.

If the median wage is $9 in country X and $8 in country Y and both countries have similar elasticities of labor supply and demand, then a minimum wage of $4 in both countries will tend to:

CorrectC. make unemployment higher in country Y than in country X.

Higher levels of unemployment benefits and employment protection:

CorrectC. raise structural unemployment.

Which of the following elements reduces structural unemployment?

CorrectC. the enhancement of worker retraining programs

Which of the following is a case of frictional unemployment?

CorrectD. Timothy is looking for a job where he can apply his expertise in computer programming.

Which of the following is considered unemployed?

John, on temporary layoff from his work, awaits recall.

A country's total civilian noninstitutionalized adult population is 1 million, and 500,000 people in this country are working, with another 20,000 people looking for work. Which of the following statements about the labor force statistics in this country is accurate?

The employment rate is 96.15% and the labor force participation rate is 52%.

Which of the following best describes the effects of a major labor union that maintains a union wage above the market wage?

The quantity of labor supplied exceeds the quantity of labor demanded, and the unemployment rate increases.

If the equilibrium wage is $9 in the market for hotel workers and $8 in the market for restaurant workers and both markets have similar elasticities of labor supply and demand, then a minimum wage of $10 in both markets will:

cause more unemployment among restaurant workers than restaurant workers.

Which type of unemployment is likely to be higher when real GDP growth is lower?

cyclical unemployment

Higher implicit tax rates tend to cause labor force participation rates to:

decrease

If the equilibrium wage is $9 in the market for hotel workers and $8 in the market for restaurant workers and both markets have similar elasticities of labor supply and demand, then a minimum wage of $4 in both markets will:

have no effect in either market

If a national government improves its unemployment benefits, its unemployment rate will most likely:

increase

When workers lose their jobs and become officially unemployed, the number of people in the labor force:

remains constant

The shift toward more of a service economy and less of a manufacturing economy in the United States has caused an increase in:

structural unemployment

The presence of discouraged workers causes the measured unemployment rate to be:

understated