Chapter 15 Econ

Which of the following people would be classified as employed in the Current Population Survey? A) Rich, who is working 20 hours a week but wants a full-time job B) Misty, who just quit her job to return full time to school C) April, who just graduated from college and is looking for work D) Jason, who was laid off from work less than 6 months ago but who has stopped looking for work E) Laura, who is unpaid but is working 10 hours a week in the family business she and her husband run

A) Rich, who is working 20 hours a week but wants a full-time job Answer: A

Structural unemployment usually lasts ________ period of time ________ unemployment A) a longer; than frictional B) a shorter; than frictional C) a shorter; than seasonal D) a shorter; than cyclical E) the same; as cyclical

A) a longer; than frictional Answer: A

When the unemployment rate is ________ the natural unemployment rate, real GDP is ________ potential GDP. A) below; above B) above; the same as C) the same as; below D) the same as; above E) above; above

A) below; above Answer: A

Over the last 50 years, the U.S. labor force participation rate of men has ________ by ________ the labor force participation of women has ________. As a result, the overall U.S. labor force participation has ________. A) decreased; less than; increased; increased B) decreased; more than; increased; decreased C) decreased; about the same rate as; increased; remained steady D) increased; less than; decreased; decreased E) increased; more than; decreased; increased

A) decreased; less than; increased; increased Answer: A

Potential GDP is the level of output produced when the unemployment rate is A) equal to the natural unemployment rate. B) greater than the natural unemployment rate. C) less than the natural unemployment rate. D) zero. E) made up of only cyclical unemployment.

A) equal to the natural unemployment rate. Answer: A

Which of the following would be considered unemployed as part of normal labor market turnover? i. Juliet, who was fired when the company where she worked went bankrupt in a recession ii. Hannah, who quit her job to find one that better suited her skills iii. Charlotte, who started looking for a job upon graduation from high school A) ii and iii B) i and ii C) i, ii and iii D) i and iii E) iii only

A) ii and iii Answer: A

Which of the following would be considered a marginally attached worker? i. Amy, who is working 20 hours per week at her father's business ii. Carl, who isn't working and has not looked for work in 3 months because he has been turned down for work when he last looked iii. Keke, who quit her job to take care of her daughter A) ii only B) i and ii C) ii and iii D) i only E) i, ii, and iii

A) ii only Answer: A

Which is true regarding cyclical unemployment? i. Cyclical unemployment is positive at business cycle peaks. ii. Cyclical unemployment is negative at business cycle troughs. iii. Cyclical unemployment is zero at full employment. A) iii only B) i, ii and iii C) i and iii D) i only E) i and ii

A) iii only Answer: A

If the number of people in the labor force ________, then ________. A) increases; the labor force participation rate increases B) increases; the unemployment rate definitely increases C) decreases; the unemployment rate definitely decreases D) decreases; the labor force participation rate increases E) decreases, the unemployment rate does not change

A) increases; the labor force participation rate increases Answer: A

U-1 is a more ________ measure of unemployment rate than the conventional U-3 measure and U-1 counts as unemployed workers who ________. A) narrow; have been unemployed for 15 weeks or more weeks B) narrow; have been laid off C) broad; have been laid off D) broad; who are discouraged workers E) broad; are marginally attached to the labor force

A) narrow; have been unemployed for 15 weeks or more weeks Answer: A

Using the table above, the Current Population Survey classifies the group of individuals who are left after subtracting from the total population groups 1, 2, 3, 4, 5, and 6 as A) not in the labor force. B) the labor force. C) employed. D) unemployed. E) discouraged workers.

A) not in the labor force. Answer: A

During a recession the unemployment rate generally ________ and during an expansion the unemployment rate generally ________. A) rises; falls B) rises; rises C) falls; rises D) rises; does not change E) does not change; falls

A) rises; falls Answer: A

Using the table above, the Current Population Survey classifies the group of individuals who are left after subtracting from the total population groups 1, 2, and 3 as A) the working-age population. B) the labor force. C) employed. D) unemployed. E) discouraged workers.

A) the working-age population. Answer: A

If Brian, age 24, had no job but was available for work and had looked for a job the week before the survey, Brian is classified in the Current Population Survey as A) unemployed. B) employed. C) a discouraged worker. D) not in the labor force. E) not in the working-age population.

A) unemployed. Answer: A

Involuntary part-time workers are workers who A) work less than 35 hours but would like to work full time. B) work more than 35 hours but would like to work less than 35 hours. C) work have lost their jobs within the last four weeks and are seeking another job. D) work less than 35 hours by choice. E) have withdrawn from the labor market.

A) work less than 35 hours but would like to work full time. Answer: A

Assume the U.S. population is 300 million. If 200 million people are of working age, 125 million are employed, and 15 million are unemployed, what is the size of the labor force? A) 200 million B) 140 million C) 125 million D) 215 million E) 175 million

B) 140 million Answer: B

Suppose the population is 300 million people, the labor force is 200 million people, the number of people employed is 185 million, and the working-age population is 170 million people. What is the unemployment rate? A) 92.5 percent B) 7.5 percent C) 8.8 percent D) 5 percent E) 20 percent

B) 7.5 percent Answer: B

The table above gives the number of people employed and the number of people unemployed in Canada, Japan, and the United States on the average during 1999. In 1999, the unemployment rate in ________ was the highest and the unemployment rate in ________ was the lowest. A) the United States; Japan B) Canada; the United States C) Japan; Canada D) Canada; Japan E) Japan; the United States

B) Canada; the United States Answer: B

Rick lost his job as a logistics and distribution coordinator nearly three years ago. After a long and failed search, Rick finally gives up and stops looking for a new job. Rick's decision to suspend his job search causes the unemployment rate to ________ and the labor force participation rate to ________. A) increase; decrease B) decrease; decrease C) stay the same; decrease D) increase; stay the same E) increase; increase

B) decrease; decrease Answer: B

Bill just graduated with his degree in economics. Through Career Services he submitted his resume to several companies and he will visit them during the next two weeks. Bill is considered A) not in the labor force. B) frictionally unemployed. C) structurally unemployed. D) cyclically unemployed. E) employed because he is visiting firms. Answer: B

B) frictionally unemployed. Answer: B

Which of the following describe the United States' unemployment rate over the last 80 years? i. The unemployment rate has decreased each year since the Great Depression. ii. The unemployment rate has averaged about 5.7 percent since 1929. iii. Job creation due to defense spending and consumer spending in the 1960s drove the unemployment rate to one of its lowest level. A) i and ii only B) ii and iii only C) i, ii and iii D) i only E) i and iii

B) ii and iii only Answer: B

When the automobile replaced horse-drawn carriages as the principal means of transportation, firms producing horse-drawn carriages went bankrupt and permanently laid off all their workers, thereby increasing i. seasonal unemployment. ii. structural unemployment. iii. cyclical unemployment. A) i only B) ii only C) i and iii D) i and ii E) ii and iii

B) ii only Answer: B

During a recession, cyclical unemployment ________ and real GDP ________. A) increases; increases B) increases; decreases C) decreases; decreases D) decreases; increases E) does not change; decreases

B) increases; decreases Answer: B

When the unemployment rate is greater than the natural unemployment rate, real GDP is A) greater than potential GDP. B) less than potential GDP. C) unrelated to potential GDP. D) equal to potential GDP. E) greater than full employment GDP.

B) less than potential GDP. Answer: B

After graduating from college, Yunis, age 22, started working for his parents' real estate business as an unpaid assistant. He works 25 hours a week helping manage rental units. In the Current Population Survey, Yunis is considered A) part of the labor force and unemployed. B) part of the labor force and employed. C) not part of the labor force. D) a discouraged worker. E) part of the labor force but not part of the working-age population.

B) part of the labor force and employed. Answer: B

Potential GDP is A) the value of the maximum amount of output that can be produced at any given time. B) the amount of real GDP that the economy would produce if it were at full employment of all resources. C) another name for real GDP. D) the amount of real GDP that the economy would produce if the unemployment rate was zero. E) the amount of real GDP that the economy would produce if all unemployment was cyclical unemployment.

B) the amount of real GDP that the economy would produce if it were at full employment of all resources. Answer: B

Using the table above, the Current Population Survey classifies the group of individuals obtained by adding groups 5 and 6 as A) the working age population. B) the labor force. C) employed. D) unemployed. E) discouraged workers.

B) the labor force. Answer: B

Full employment means that A) the unemployment rate is below 6 percent. B) there is no cyclical unemployment. C) the unemployment rate is zero. D) the frictional unemployment rate is equal to the structural unemployment rate. E) there is no frictional unemployment.

B) there is no cyclical unemployment. Answer: B

The unemployment rate is equal to A) (labor force ÷ population) × 100. B) (number of employed people ÷ labor force) × 100. C) (number of unemployed people ÷ labor force) × 100. D) (number of unemployed people ÷ number of employed) × 100. E) (number of unemployed people ÷ working-age population) × 100.

C) (number of unemployed people ÷ labor force) × 100. Answer: C

Using the table above, the number of people in the labor force is A) 145 million. B) 165 million. C) 175 million. D) 195 million. E) 185 million.

C) 175 million. Answer: C

Using the table above, the working-age population is A) 155 million. B) 170 million. C) 195 million. D) 250 million. E) 220 million.

C) 195 million. Answer: C

Using the table above, the unemployment rate is A) 11.2 percent. B) 6.3 percent. C) 4.2 percent. D) 10 percent. E) 5.8 percent.

C) 4.2 percent. Answer: C

In the table above, the size of the labor force is A) 80 million. B) 46 million. C) 42 million. D) 40 million. E) 34 million.

C) 42 million. D) 40 million. E) 34 million. Answer: C

The table shows data reported by Statistics Canada for 1999. In 1999, the unemployment rate was A) 1.2 million. B) 5.0 percent. C) 7.6 percent. D) 7.9 percent. E) 6.1 percent.

C) 7.6 percent. Answer: C

Using the table above, the labor participation rate is A) 67 percent. B) 48 percent. C) 75 percent. D) 83 percent. E) 40 percent.

C) 75 percent. D) 83 percent. E) 40 percent. Answer: C

Which of the following people is frictionally unemployed? A) Cara, an executive who lost her job because her company could not compete with foreign competition and whose skills are not wanted by other companies B) Tran, a building construction supervisor who was fired because of a downturn in the building industry that is the result of a general downturn in the economy C) Eugene, a pharmaceutical drug salesman who was laid off when his company lost a large contract with an HMO D) Amanda, a sales associate at J.C. Penney who quit her job to attend school full time E) Samantha, who worked part-time in J.C. Penney to help with the Christmas rush but was laid off in January

C) Eugene, a pharmaceutical drug salesman who was laid off when his company lost a large contract with an HMO Answer: C

________ unemployment changes slowly and depends on ________. A) Frictional; the skills of the unemployed B) Seasonal; the rate at which people enter and exit the labor force C) Frictional; the rate at which people enter and exit the labor force D) Structural; the rate at which people enter the labor force E) Structural; the inflation rate

C) Frictional; the rate at which people enter and exit the labor force Answer: C

A marginally attached worker is A) a worker who is unhappy at his or her job. B) a worker who is looking for a job but can't find one. C) a worker who does not have a job and is available and wants one but has not made any efforts to find a job within the previous four weeks.

C) a worker who does not have a job and is available and wants one but has not made any efforts to find a job within the previous four weeks. Answer: C

The working-age population consists of all the people in the population A) aged 16 and over. B) aged 16 to 65. C) aged 16 and over who are not in jail, hospital, or an institution or in the U.S. Armed Forces. D) aged 21 and over who are not in jail, hospital, or an institution or in the U.S. Armed Forces. E) who are employed plus the unemployed people.

C) aged 16 and over who are not in jail, hospital, or an institution or in the U.S. Armed Forces. Answer: C

The natural unemployment rate is the unemployment rate that exists when there is no A) structural unemployment. B) frictional unemployment. C) cyclical unemployment. D) cyclical or structural unemployment. E) unnecessary unemployment.

C) cyclical unemployment. Answer: C

The working-age population includes A) those in jails and hospitals. B) youngsters between the ages of 14 and 16 if they are working at least part time. C) employed and unemployed people over the age of 16. D) only employed people over the age of 16. E) people over the age of 16 who are in the Army.

C) employed and unemployed people over the age of 16. Answer: C

Discouraged workers who are over 16 years old are i. not counted as unemployed. ii. part of the working-age population. iii. part of the labor force. A) i only B) ii only C) i and ii D) ii and iii E) i, ii, and iii

C) i and ii Answer: C

Phillip is a 22-year old who has no job and is available for work, but has not actively looked for a job in the last month. The Current Population Survey identifies Phillip as ________, ________ the labor force, and ________ the working-age population. A) unemployed; part of; part of B) unemployed; part of; not part of C) not unemployed; not part of; part of D) not unemployed; not part of; not part of E) not unemployed; part of; part of

C) not unemployed; not part of; part of Answer: C

Which type of unemployment arises when changes in technology or international competition change the skills needed to perform jobs or change the location of jobs? A) cyclical B) fluctuating C) structural D) frictional E) skill-set

C) structural Answer: C

In order to obtain the data used to calculate the unemployment rate, the Bureau of Labor Statistics A) adds the number of people collecting unemployment insurance from each state. B) adds the state unemployment claims reports. C) uses a survey from 60,000 households. D) adds together all the reports of layoffs from businesses. E) uses a survey from 160,000 firms.

C) uses a survey from 60,000 households. Answer: C

The highest unemployment rate in U.S. history was about A) 10.2 percent in 2009. B) 5.9 percent in 1972. C) 10 percent in 1982. D) 25 percent in 1933. E) 52 percent in 1939.

D) 25 percent in 1933. Answer: D

In the table above, the unemployment rate is A) 50.0 percent. B) 15.0 percent. C) 10.0 percent. D) 4.8 percent. E) 5.0 percent.

D) 4.8 percent. Answer: D

In fall 2009, the population of the United States was 301 million, the working-age population was 235.7 million, the total number of people employed and unemployed was 154.9 million, and the total number of unemployed people was 14.7 million. What is the unemployment rate? A) 51 percent B) 6.2 percent C) 4.9 percent D) 9.5 percent E) 4.6 percent

D) 9.5 percent Answer: D

Which of the following persons is NOT considered a part of the labor force? A) Mary, who has a part-time job as a day care specialist B) Lones, an unemployed mechanic looking for a new job C) Jameson, an accountant who has been temporarily laid off during the holiday season D) Desire, a wealthy hedge fund manager who just took early retirement E) Lucy, who works 20 hours a week in her father's restaurant for no pay

D) Desire, a wealthy hedge fund manager who just took early retirement Answer: D

Which of the following is true? A) To be classified as employed, you must be a full-time worker at a paid job. B) To be classified as employed, you must work at least 20 hours per week at a paid job. C) Part-time workers are all those who work less than 40 hours per week. D) To be classified as employed, you must work at least 1 hour per week at a paid job or 15 hours or more as an unpaid worker in your family business. E) If you are not working and turn down a job offer in the previous week, you are no longer classified as unemployed.

D) To be classified as employed, you must work at least 1 hour per week at a paid job or 15 hours or more as an unpaid worker in your family business. Answer: D

National differences in women's labor force participation rates are explained by A) family friendly labor market policies. B) percentage of women with college degree. C) cultural differences. D) all of the above E) none of the above

D) all of the above Answer: D

Cyclical unemployment includes people who become unemployed from A) changes in the seasons. B) changes in international competition. C) technological changes. D) changes in the business cycle. E) normal labor market turnover.

D) changes in the business cycle. Answer: D

In the Current Population Survey, a person is considered unemployed if the person A) is without a job. B) is working anything less than 40 hours per week. C) is working without pay. D) does not have a job and is actively looking for a job. E) is working less than 20 hours per week.

D) does not have a job and is actively looking for a job. Answer: D

Which is true concerning U-2? i. It does not count marginally attached workers as unemployed. ii. It counts as unemployed workers who were laid off. iii. It is smaller than U-3. A) i only B) i and ii C) i and iii D) ii and iii E) i, ii and iii

E) i, ii and iii Answer: E

The unemployment rates during the last 10 years in the Eurozone was A) constantly lower than the unemployment rate in the United States and not rising toward the U.S. unemployment rate. B) constantly lower than the unemployment rate in the United States but were rising toward the U.S. unemployment rate. C) more or less constant at 3 percent. D) generally higher than the U.S. unemployment rate. E) approximately equal to those in the United States, with some years the U.S. unemployment rate being slightly higher and in other years the U.S. unemployment rate being slightly lower.

D) generally higher than the U.S. unemployment rate. Answer: D

As technology advancements have led to more white collar jobs, A) the unemployment rate has steadily fallen. B) the labor force participation rate for men and women have increased. C) a higher percentage of men of working age have entered the labor force. D) the labor force participation rate for women has increased over the last 50 years. E) the labor force participation rate for women has decreased since 1960.

D) the labor force participation rate for women has increased over the last 50 years. Answer: D

In 2012, part-time workers for noneconomic reasons were about ________ of total employment, and part-time workers for economic reasons were about ________ of total employment. A) 3 percent; 25 percent B) 17 percent; 17 percent C) 2 percent; 12 percent D) 13 percent; 20 percent E) 13 percent; 6 percent

E) 13 percent; 6 percent Answer: E

Using the table above, the unemployment rate is A) 5.13 percent. B) 5.88 percent. C) 6.45 percent. D) 6.90 percent. E) 5.71 percent.

E) 5.71 percent. Answer: E