Econ 155 Key Terms
Which of the following is not correct?
Unemployment insurance decreases frictional unemployment.
The natural rate of unemployment (i) is the economy's desirable level of unemployment. (ii) arises from a single problem that has a single solution. (iii) is the amount of unemployment that does not go away on its own.
(iii) only
If the government imposes a minimum wage of $4, how many workers will be unemployed?
0
The labor force of Aridia in 2011 was
1,900
Suppose that the Bureau of Labor Statistics reports that the entire adult population of Mankiwland can be categorized as follows: 25 million people employed, 3 million people unemployed, 1 million discouraged workers, and 1 million people who are either students, homemakers, retirees, or other people not seeking employment.
10.7%
The unemployment rate of Aridia in 2012 was
11.1%.
What is the adult male population in Meditor?
135 million
In June 2009 the Bureau of Labor Statistics reported an adult population of 234.9 million, unemployment of 12.4 million, and employment of 141.6 million. Based on these numbers the labor-force participation rate was
154/234.9.
Suppose that the adult population in the country of Atlantis is 115 million. If 80 million people are employed and 5 million are unemployed, then
30 million are not in the labor force
Since 1960, the natural rate of unemployment in the U.S. has been between
5% and 6%
If the local government imposed a minimum wage of $7 in Productionville, how many people would be unemployed?
5,000
A typical American worker covered by unemployment insurance receives
50 percent of his former wages for 26 weeks.
In 2014, the Italian adult non-institutionalized population was 38.8 million, the labor force was 25.4 million, and the number of people employed was 22 million. According to these numbers, the Italian labor-force participation rate and unemployment rate were about
65.5% and 13.4%
In 2016 the Bureau of Labor Statistics reported that there were 57.1 million people over age 25 whose highest level of education was some college or an associate degree. Of these, 36.4 million were employed and 1.5 million were unemployed. What were the labor-force participation rate and the unemployment rate for this group?
66.4% and 4.0%
Suppose that the adult population is 4 million, the number of unemployed is 0.25 million, and the labor-force participation rate is 75%. What is the unemployment rate?
8.3%
Unemployment insurance
All of the above are correct.
Which of the following is not correct?
Minimum wages are the predominant reason for unemployment in the U.S. economy.
Buddy is the owner of a firm that bottles beer in St. Louis, Missouri. There are many other such firms in the area. Buddy decides that if he pays his workers a wage higher than the going market wage, his profits will increase. Which of the following is a likely explanation for his decision?
The higher the wage, the less often his workers will choose to leave his firm
Efficiency wages, minimum-wage laws, and unions all keep wages
above the equilibrium level, causing a surplus of labor.
Minimum-wage laws
and firms paying wages above equilibrium to reduce worker turnover both create structural unemployment
The deviation of unemployment from its natural rate is called
cyclical unemployment
If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7 percent, then by definition there is
cyclical unemployment amounting to 0.5 percent of the labor force
Efficiency wages
increase productivity but increase unemployment
Efficiency wages
increase structural unemployment by keeping wages above equilibrium
Satchel loses his job and immediately begins looking for another. Other things the same, the unemployment rate
increases, and the labor-force participation rate is unaffected.
Which of the following is not an explanation for structural unemployment?
job search
Frictional unemployment results from
job searching. It is often thought to explain relatively short spells of unemployment
Unemployment numbers reported by the Bureau of Labor Statistics are reported based on a
monthly survey of about 60,000 households.
Josh is a full-time college student who is not working or looking for a job. The Bureau of Labor Statistics counts Josh as
neither in the labor force nor unemployed.
The Bureau of Labor Statistics counts discouraged workers as
out of the labor force. If they were counted as unemployed the unemployment rate would be higher
More generous unemployment insurance would
raise frictional unemployment
Unions
raise the wages of unionized workers and raise unemployment
Cyclical unemployment refers to
short-run fluctuations around the natural rate of unemployment.
Cyclical unemployment is closely associated with
short-run ups and downs of the economy
Unions contribute to
structural but not frictional unemployment.
