Chapter 8 - Hailey

(Table: Employment Data) Look at the table Employment Data. If marginally attached workers are included in the labor force and in the unemployment rate, the unemployment rate is:

6.25% WRONG

(Table: Population Data for Estill County) Look at the table Population Data for Estill County. What is the labor force participation rate?

64% WRONG

If the price level increases, real wages will:

decrease

(Figure: The Minimum Wage) Look at the figure The Minimum Wage. What is the quantity of labor demanded at a binding minimum wage of P3?

Q4 WRONG

(Figure: The Minimum Wage) Look at the accompanying figure on the labor market. The binding minimum wage of P3 leads to unemployment of:

Q4-Q1

The rate of unemployment is found by dividing the:

number of people not working but looking for work by the number of people not working but looking for work plus the number of people employed.

Unanticipated inflation:

reduces the real value of debt.

The unemployment rate equals the number _____ divided by the number _____ times 100.

unemployed; labor force

If 99 million people are working and 1 million are unemployed but actively seeking work, then the unemployment rate is:

1%

(Table: Labor Force Data) Look at the table Labor Force Data. Suppose the labor force participation rate is 70%. The labor force is equal to:

105 million

If the rate of unemployment is 10% and the labor force is 130 million, the number of unemployed workers is:

13 million

(Table: Unemployment and Employment Data) Look at the table Unemployment and Employment Data. If marginally attached workers are included in the labor force and in the unemployment rate, the unemployment rate in this economy is

5% WRONG

Suppose that roughly 8 million people in the United States were actively seeking jobs but had not found them this month, the same number as last month. Suppose that 2 million of the people who were unemployed last month gave up their search this month and stopped looking for work. What will happen to the official unemployment rate this month, all other things unchanged?

It will fall, because 2 million people are not in the labor force this month and are not counted as unemployed.

Which of the following situations is likely to lead to an increase in discouraged workers?

The availability of jobs falls.

One factor that raises the natural rate of unemployment is:

a population boom that increases the number of young workers joining the labor force.

Economists generally agree that sufficiently high minimum wage laws:

cause unemployment.

Last week Stephanie quit her job as a copywriter at an advertising agency. She has spent the past few days browsing the help wanted ads but hasn't found anything that matches her skills. Stephanie is best classified as:

frictionally unemployed.

(Figure: The Effect of a Minimum Wage) Look at the figure The Effect of a Minimum Wage. Suppose the labor market is in equilibrium at E when the government imposes a minimum wage of WF. The quantity of labor supplied may_____, resulting in structural unemployment.

increase to QS

If the actual inflation rate is less than the expected inflation rate:

lenders gain and borrowers lose.

A survey reveals that on a small island initially 100 people have jobs, 25 people don't have jobs but are looking for jobs, and 45 people are neither working nor looking for work. Suppose that 15 of the 45 people who weren't looking for work now begin looking for work. There are now 40 people looking for work and 100 people working. The unemployment rate:

rises to 28.6%.

A survey reveals that on a small island initially 40 people have jobs, 10 people are not working but looking for jobs, and 30 people are neither working nor looking for work. Suppose that 10 of the 30 people who weren't working or looking for work now begin looking for work. There are now 20 people without jobs but looking for work and 40 people working. The unemployment rate:

rises to 33.3%.

Efficiency wages are:

set above equilibrium wages to act as an incentive for better performance.

Annie's credit union charges a fee for transferring funds from her money market account to her checking account. The rate of inflation has been 12% lately, so Annie has transferred funds from her money market account to her checking account more often than usual. This cost is an example of the _____ cost of high inflation.

shoe-leather

Sam, who is 55 years old and has been a steelworker for 30 years, is unemployed because the steel plant in his town closed and moved to Mexico. Sam is _____ unemployed.

structurally

Which of the following situations is likely to increase the natural rate of unemployment?

the entrance of many new people into the labor force