Econ Chapter 15

Which of the following is an explanation for the existence of frictional unemployment? A. Efficiency wages B. Minimum-wage laws C. Unions D. Job search

Job search

Some degree of unemployment is inevitable in a complex economy. True False

True

The labor-force participation rate measures the percentage of the A. total adult population that is in the labor force. B. total adult population that is employed. C. labor force that is employed. D. labor force that is either employed or unemployed.

total adult population that is in the labor force.

Suppose that some country had an adult population of about 46 million, a labor-force participation rate of 75 percent, and an unemployment rate of 8 percent. How many people were unemployed? A. 2.54 million B. 2.76 million C. 3.68 million D. 8 million

2.76 million

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 A. 30 million are not in the labor force. B. 35 million are in the labor force. C. 75 million are in the labor force. D. 35 million are not in the labor force.

30 million are not in the labor force

Which of the following is an example of an efficiency wage? A. A higher wage paid to a more experienced worker B. A below-equilibrium wage paid by a small business exempt from minimum-wage laws C. An above-equilibrium wage paid by a firm to reduce turnover costs D. A wage tied to participation in a government-sponsored job training program

An above-equilibrium wage paid by a firm to reduce turnover costs

Which of the following includes everyone in the adult population that the Bureau of Labor Statistics counts as "unemployed"? A. Anyone who is not currently employed B. Anyone who chose not to for work for the past two weeks C. Anyone who is not employed, is available for work, has looked for work in the past four weeks, and anyone who is waiting to be recalled from a job from which they have been laid off D. Anyone who is employed part time and has searched for full time employment in the past four weeks

Anyone who is not employed, is available for work, has looked for work in the past four weeks, and anyone who is waiting to be recalled from a job from which they have been laid off

Providing training for unemployed individuals is primarily intended to reduce A. frictional unemployment. B. seasonal unemployment. C. structural unemployment. D. cyclical unemployment.

frictional unemployment.

Tatiana is waiting to be recalled to a job from which she was laid off. Ivan was fired but has not looked for work during the last two months. Who does the Bureau of Labor Statistics count as "unemployed"? A. Tatiana but not Ivan B. Ivan but not Tatiana C. Both Ivan and Tatiana D. Neither Ivan nor Tatiana

Tatiana but not Ivan

Of the following groups, who is eligible for unemployment insurance benefits? A. The unemployed quit their jobs B. The unemployed who were laid off because their previous employers no longer needed their skills C. The unemployed who were fired for cause D. The unemployed who just entered the labor force

The unemployed who were laid off because their previous employers no longer needed their skills

Who of the following is not included in the Bureau of Labor Statistics' "employed" category? A. Those who worked in their own business B. Those who worked as unpaid workers in a family member's business C. Those waiting to be recalled to a job from which they had been laid off D. Those who were temporarily absent from work because of vacation

Those waiting to be recalled to a job from which they had been laid off

When a country keeps its workers as fully employed as possible, it achieves a higher level of GDP than if many of its workers were idle. True False

True

Which of the following is not a cause of the decline in the U.S. men's labor-force participation rate over the past several decades? A. Young men now stay in school longer than their fathers and grandfathers did. B. Older men now retire earlier and live longer. C. With more women employed, there are fewer jobs now available to men. D. More fathers now stay at home to raise their children.

With more women employed, there are fewer jobs now available to men.

The natural rate of unemployment is the A. unemployment rate that would prevail with zero inflation. B. rate associated with the highest possible level of GDP. C. difference between the long-run and short-run unemployment rates. D. amount of unemployment that the economy normally experiences.

amount of unemployment that the economy normally experiences.

Matilda just graduated from college. In order to devote all her efforts to college, she didn't hold a job. She is going to tour around the country on her motorcycle for a month before she starts looking for work. Other things the same, the unemployment rate A. increases, and the labor-force participation rate decreases. B. and the labor-force participation rate both increase. C. increases, and the labor-force participation rate is unaffected. D. and the labor-force participation rate are both unaffected.

and the labor-force participation rate are both unaffected.

The natural rate of unemployment includes A. both frictional and structural unemployment. B. neither frictional nor structural unemployment. C. structural but not frictional unemployment. D. frictional but not structural unemployment.

both frictional and structural 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 A. cyclical unemployment amounting to 0.5 percent of the labor force. B. frictional unemployment amounting to 0.5 percent of the labor force. C. structural unemployment amounting to 0.5 percent of the labor force. D. search unemployment amounting to 0.5 percent of the labor force.

cyclical unemployment amounting to 0.5 percent of the labor force.

Sectoral shifts in demand for output A. create structural unemployment. B. immediately reduce unemployment. C. increase unemployment due to job search. D. do not affect demand for labor.

increase unemployment due to job search.

The unemployment rate is computed as the number of unemployed A. divided by the labor force, all times 100. B. divided by the number of employed, all times 100. C. divided by the adult population, all times 100. D. times the labor-force participation rate, all times 100.

divided by the labor force, all times 100.

To be counted as "employed" in the U.S. labor force statistics, a person A. must be working for pay and be working full time. B. must be working for pay but does not have to be working full time. C. does not have to be working for pay if they are working for a family business but must be employed full time. D. does not have to be working for pay if they are working for a family business and does not have to be working full time.

does not have to be working for pay if they are working for a family business and does not have to be working full time.

The theory of efficiency wages explains why A. setting wages at the equilibrium level may increase unemployment. B. it may be in the best interest of firms to offer wages that are above the equilibrium level. C. the most efficient way to pay workers is to pay them according to their skills. D. it is efficient for firms to set wages at the equilibrium level.

it may be in the best interest of firms to offer wages that are above the equilibrium level.

Josh is a full-time college student who is not working or looking for a job. The Bureau of Labor Statistics counts Josh as A. employed. B. unemployed. C. marginally attached worker. D. not in the labor force.

not in the labor force.

Marginally attached workers are people who are A. looking for a better job than they currently have. B. not working and are not looking for work, but would work if asked. C. working part-time while they go to school or get training for a better job. D. only a few years from retirement.

not working and are not looking for work, but would work if asked.

The labor force equals the A. number of people employed. B. number of people employed plus the number of people unemployed. C. number of people employed plus the number of people unemployed plus teenagers between ages 14 and 16 who work at least 10 hours a week. D. adult population.

number of people employed plus the number of people unemployed.

Most spells of unemployment are A. long, and most unemployment observed at any given time is long term. B. long, but most unemployment observed at any given time is short term. C. short, but most unemployment observed at any given time is long term. D. short, and most unemployment observed at any given time is short term.

short, but most unemployment observed at any given time is long term.

Cyclical unemployment refers to A. the portion of unemployment created by job search. B. short-run fluctuations around the natural rate of unemployment. C. changes in unemployment due to changes in the natural rate of unemployment. D. the portion of unemployment created by wages set above the equilibrium level.

short-run fluctuations around the natural rate of unemployment.

Evidence from research studies by economists A. shows that increased unemployment benefits decrease the job search efforts of the unemployed. B. shows that increased unemployment benefits have virtually no effect on the job search efforts of the unemployed. C. shows that increased unemployment benefits increase the job search efforts of the unemployed. D. is unclear regarding what increased unemployment benefits do to the job search efforts of the unemployed.

shows that increased unemployment benefits decrease the job search efforts of the unemployed.

Minimum wages create unemployment in markets where they create a A. shortage of labor. Unemployment of this type is called frictional. B. shortage of labor. Unemployment of this type is called structural. C. surplus of labor. Unemployment of this type is called frictional. D. surplus of labor. Unemployment of this type is called structural.

surplus of labor. Unemployment of this type is called structural.