Econ 202 Exam 2 Chapter 9 Study Set

Suppose that 100 people that were officially classified as ʺunemployedʺ quit looking for work in order to go back to school full-time. This change will cause: A) no change in the unemployment rate and a decrease in the labor force participation rate. B) an increase in the unemployment rate and an increase in the labor force participation rate. C) a decrease in the unemployment rate and no change in the labor force participation rate. D) a decrease in the unemployment rate and a decrease in the labor force participation rate. an increase in the unemployment rate and a decrease in the labor force participation rate.

a decrease in the unemployment rate and a decrease in the labor force participation rate.

An economic slow-down would cause the labor: A) supply curve to shift left. B) supply curve to shift right. C) demand curve to shift left. D) demand curve to shift right.

demand curve to shift left.

When growth goes down, unemployment tends to go: A) up shortly after, and vice versa. B) down at the same time, and vice versa. C) up at the same time, but remains sticky on the way down and lags behind. D) down shortly after, and vice versa.

down at the same time, and vice versa.

We would expect that policies to protect workers would: A) lead to greater unemployment. B) have no impact on unemployment. C) lead to less unemployment. D) affect those seasonally unemployed more profoundly than other unemployed workers

lead to greater unemployment.

Discouraged workers are classified by the BLS as A) unemployed. B) out of the labor force. C) part of the labor force. D) employed. E) More than one of the above is correct

out of the labor force.

Which of the following is an example of a worker experiencing cyclical unemployment? A) A worker quits his job because he does not get along with his boss. B) A lifeguard who was hired during the summer season is laid off after summer is over. C) A Freightliner employee that got laid off because of the recession of 2001. D) An assembly line worker who loses his job because of automation. E) A worker that changes jobs to move closer her family.

A Freightliner employee that got laid off because of the recession of 2001.

Which of the following is not the result of wage stickiness in an economic downturn? A) Cyclical unemployment. B) A shortage of labor. C) Actual wages are temporarily above the market-clearing level. D) A surplus of labor.

A shortage of labor.

Members of the military are currently not included in the employment, labor force, and working-age population statistics. What impact would including members of the military in these statistics have on the unemployment rate and the labor force participation rate? A) Including the military would reduce both the unemployment rate and the labor force participation rate. B) Including members of the military would reduce the unemployment rate and increase the labor force participation rate. C) Including the military would increase both the unemployment rate and the labor force participation rate. D) Including members of the military would increase the unemployment rate and reduce the labor force participation rate.

Including members of the military would reduce the unemployment rate and increase the labor force participation rate.

Minimum wage laws cause unemployment because the legal minimum wage is set A) too low, thus discouraging more workers. B) above the market wage, causing the quantity of labor demanded to be greater than the quantity of labor supplied. C) below the market wage, causing the quantity of labor demanded to be greater than the quantity of labor supplied. D) above the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied. below the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied.

above the market wage, causing the quantity of labor demanded to be less than the quantity of labor supplied.

An increase in cyclical unemployment will result in A) an increase in structural unemployment. B) a decrease in frictional unemployment. C) an increase in the natural rate of unemployment. D) an increase in the unemployment rate. E) More than one of the above is correct.

an increase in the unemployment rate.

An increase in frictional unemployment will result in A) an increase in structural unemployment. B) a decrease in the natural rate of unemployment. C) a decrease in cyclical unemployment. D) an increase in the unemployment rate. E) More than one of the above is correct.

an increase in the unemployment rate.

The labor supply curve: A) has a negative slope. B) shows that, all things being equal, more workers will want to work when wages are higher and less will want to work when wages are lower. C) shows the relationship between the total quantity of labor supplied by all firms in the economy and the wage rate. D) All of these are true.

shows that, all things being equal, more workers will want to work when wages are higher and less will want to work when wages are lower.

People who lost their jobs as hand-drawn animators because of the popularity of computer-generated 3D animation are examples of persons who are suffering A) frictional unemployment. B) unnatural unemployment. C) classical unemployment. D) cyclical unemployment. E) structural unemployment.

structural unemployment.