Homework #4

Deviations from the natural rate of unemployment are known as: frictional unemployment. structural unemployment. random unemployment. cyclical unemployment.

cyclical unemployment.

An example of frictional unemployment is a(n): autoworker who is temporarily laid off from an automobile company due to a decline in sales. geologist who is permanently laid off from an oil company due to a new technological advance. worker at a fast-food restaurant who quits work and attends college. real estate agent who leaves a job in Texas and searches for a similar, higher paying job in California.

real estate agent who leaves a job in Texas and searches for a similar, higher paying job in California.

Sam, who is 55 years old and has been a steel worker for 30 years, is unemployed because the steel plant in his town closed and moved to Mexico. Sam is experiencing: cyclical unemployment. permanent unemployment. frictional unemployment. structural unemployment

structural unemployment

The labor force is: the total of people employed. the total population. the total of the population of working age. the total of people employed and unemployed.

the total of people employed and unemployed.

If a country has a working-age population of 200 million, 135 million people with jobs, 10 million people who were looking for a job but have given up, and 5 million people unemployed and seeking employment, then its labor force is: 150 million. 145 million. 140 million. 135 million.

140 million.

If actual unemployment is 6.2% and the natural rate of unemployment is 4%, cyclical unemployment is: 6.2%. 10.2%. 4%. 2.2%.

2.2%

The country of Livonia has an adult population of 100 million. Sixty percent of Livonia's population are employed, but 10% of the people are unemployed. The Labor Force Participation Rate in Livonia is: 70%. 60%. 7%. 10%.

70%

A survey reveals that on a small island 1,000 people have jobs, 250 people are looking for jobs, and 450 people are neither working nor looking for work. The unemployment rate on the island is: 20.0%. 25.0%. 45.0%. 15.6%.

?

If the actual unemployment rate is 7% and the cyclical unemployment rate is 2%, then the natural rate of unemployment is: 2%. 5%. 7%. 9%.

5%

Unemployment that occurs because it takes workers and employees time to find each other is called: cyclical unemployment structural unemployment frictional unemployment discouraged unemployment

frictional unemployment

A survey reveals that on a small island initially 1,000 people have jobs, 250 people are looking for jobs, and 450 people are neither working nor looking for work. Suppose that 150 of the 450 people who weren't looking for work now begin looking for work. There are now 400 people looking for work and 1,000 people working. What happens to the unemployment rate? It falls to 20%. It rises to 28.6%. It rises to 50.0%. Nothing happens to the unemployment rate, because these people weren't working before and they aren't working now.

It rises to 28.6%.

Suppose that in a particular month roughly 8 million people in the United States were seeking jobs but had not found them, as in the previous month. Suppose that 2 million of these people gave up their searches in the current month and stopped looking for work. What will happen to the unemployment rate, all other things unchanged? It will rise. It will fall. It will be unaffected, because none of these people is working. Not enough information is provided to determine what happens to the unemployment rate.

It will fall.

Which of the following statements is false? Unemployment always rises during recessions. Unemployment always falls during expansions. There exists a strong negative relationship between growth in real GDP and changes in unemployment. In general, there is a trade-off between inflation and unemployment in the short run.

Unemployment always falls during expansions.

To be counted as unemployed, one must: have had a job previously. be out of work and be actively looking for a job. have had a job before and be actively looking for work. actively looking for a job and have at least a high-school degree or its equivalent

be out of work and be actively looking for a job.

The official unemployment rate reported by the government may tend to understate the amount of unemployment by: including discouraged workers in the calculations. excluding discouraged workers who are not actively seeking employment. including people over 65 who aren't retired in the calculations. excluding teenagers from the calculations.

excluding discouraged workers who are not actively seeking employment.

Ron quit his job in retail management and moved to Florida with his wife, a physician who opened a new practice there. He was not successful in his job search for the next four months. This type of unemployment is known as: structural unemployment. cyclical unemployment. frictional unemployment. seasonal unemployment.

frictional unemployment.

An example of structural unemployment is a(n): autoworker who is temporarily laid off from an automobile company due to a decline in sales. geologist who is permanently laid off from an oil company due to an increase in wages won by labor unions. worker at a fast-food restaurant who quits work and attends college. real estate agent who leaves a job in Texas and searches for a similar, higher paying job in California.

geologist who is permanently laid off from an oil company due to an increase in wages won by labor unions.

If more women enter or reenter the labor force, the natural rate of unemployment is expected to: decrease. remain unchanged. increase. decrease if they are well-educated.

increase.

When the economy is in full employment, unemployment is zero. only cyclical unemployment is zero. only frictional unemployment is zero. the natural rate of unemployment is zero.

only cyclical unemployment is zero.

Unemployment rates are usually higher in Europe than in the United States because: the minimum wage is higher in the United States than in Europe. economic policy in the United States is much more effective than European economic policy. there are more unskilled, uneducated workers in Europe than in the United States. unemployment benefits are more generous in Europe than in the United States.

unemployment benefits are more generous in Europe than in the United States.