chapter 8

In April 2018, the Bureau of Labor Statistics reported that 155.2 million people were employed and 6.3 million people were unemployed. What was the official unemployment rate? 3.2 percent 7.7 percent 3.9 percent 4.6 percent 6.4 percent

3.9%

Suppose the population of the U.S. is 300 million people. Of these, the U.S. Bureau of Labor Statistics classifies 70 million people as "not surveyed," 80 million people as not in the labor force, and 144 million as employed. What would be the unemployment rate in this example? 10% 2% 4% 8% 6%

4%

Suppose the United States enters a recession, what type of unemployment would be most likely to rise as a result of the recession? -Efficiency unemployment -Cyclical unemployment -Frictional unemployment -Structural unemployment -Sectoral unemployment

cyclical unemployment

Since 1950 in the United States, the labor force participation rate for males has _____ and the labor force participation rate for females has ____. decreased; increased decreased; decreased increased; decreased None of the above increased; increased

decreased; increased

How would the U.S. Bureau of Labor Statistics classify a 20-year old individual enrolled in college full-time and working 5 hours per week in the campus bookstore? -Not surveyed -Unemployed -Employed -Not in the labor force -A discouraged worker

employed

The "efficiency wage" theory states that ... -employers can motivate employees by paying them more than the prevailing wage. -existing employees can keep their wages artificially high as compared to newer workers. -there is only one wage rate that will result in equilibrium in the labor market. -wages should be set with long-term contracts to avoid inefficiencies associated with temporary changes in market conditions. -wages should be set with short-term contracts to allow for the maximum flexibility as market conditions change.

employers can motivate employees by paying them more than the prevailing wage.

What type of unemployment would prevent the unemployment from falling to zero, even in a very good job market? -Cyclical unemployment -Recessionary unemployment -Structural unemployment -Frictional unemployment -Efficiency unemployment

frictional unemployment

According to John Maynard Keynes, the key to reducing high levels of unemployment was to ... -eliminate government intervention in the labor market. -set long-term employment contracts that eliminate uncertainty. -create retraining programs so that unemployed workers can acquire new skills as technology changes. -increase aggregate demand. -offer employees above-equilibrium wages to attract more workers.

increase aggregate demand

The introduction of compact discs made vinyl records obsolete. To the extent this caused higher unemployment among workers who had manufactured records, which type of unemployment was created? -Cyclical unemployment -Underemployment -Frictional unemployment -Efficiency unemployment -Structural unemployment

structural unemployment

If the Bureau of Labor Statistics included incarcerated individuals in the labor force, then... the unemployment rate would be lower than it is. the labor force would be about the same as it is. the unemployment rate would be about the same as it is. the unemployment rate would be higher than it is. the labor force would be smaller than it is.

the unemployment rate would be higher than it is

Which one of the following categories defined by the U.S. Bureau of Labor Statistics contains the fewest number of people? -Individuals not in the labor force -Employed individuals -Individuals not surveyed by BLS -Individuals in the labor force -Unemployed individuals

unemployed individuals

The "sticky wage" theory states that ... -wages may stay at below-equilibrium levels for an extended period of time, thus keeping unemployment low. -wages may stay at above-equilibrium levels for an extended period of time, thus keeping unemployment high. -wages may stay at above-equilibrium levels for an extended period of time, thus keeping unemployment low. -wages may stay at below-equilibrium levels for an extended period of time, thus keeping unemployment high. -wages may stay at equilibrium levels for an extended period of time, thus keeping unemployment low.

wages may stay at above-equilibrium levels for an extended period of time, thus keeping unemployment high.

The U.S. Bureau of Labor Statistics bases its unemployment statistics on what population? -All civilian, non-institutionalized, non-self-employed people over age 21 -All civilians over age 16 -All civilian, non-institutionalized people over age 21 -All civilians over age 21 -All civilian, non-institutionalized people over age 16

All civilian, non-institutionalized people over age 16

How would the U.S. Bureau of Labor Statistics classify a 25-year old individual attending graduate school full time and not working any hours at a paid job by choice? -Unemployed -Underemployed -Employed -A discouraged worker -Not in the labor force

Not in the labor force

How would the U.S. Bureau of Labor Statistics classify a 15-year old individual working 10 hours per week at a restaurant? -A discouraged worker -Unemployed -Employed -Not in the labor force -Not surveyed

Not surveyed

Which one of the following people would NOT be classified as unemployed according to the U.S. Bureau of Labor Statistics? -Someone in the labor force who has just involuntarily lost their job, and is actively searching for a new one. -Someone working 20 hours per week in a family business but is not being paid. -Someone who took time off to raise a child and has just started actively searching for a job. -Someone in the labor force who has just quit a job, and is actively searching for a new one. -Someone who has just started actively searching for a job after graduating from college.

Someone working 20 hours per week in a family business but is not being paid.

Which one of the following statements is FALSE? -"Discouraged workers" are a subset of people classified by the U.S. Bureau of Labor Statistics as not in the labor force. -Someone not currently working who has just entered the labor force after graduating college and is actively seeking his or her first job would not be classified as unemployed by the U.S. Bureau of Labor Statistics. -Cyclical unemployment results from economic recessions. -According to the U.S. Bureau of Labor Statistics, a person who does any work for pay or profit is classified as employed regardless of how many hours they work. -Frictional unemployment is a result of people being in transition between jobs.

Someone not currently working who has just entered the labor force after graduating college and is actively seeking his or her first job would not be classified as unemployed by the U.S. Bureau of Labor Statistics.

What is the main policy implication of applying the Classical model to the labor market? -The government should encourage the creation of labor unions so that employees and employers have equal power in the labor market. -The government should increase funding for public schools so that all workers will be able to compete on a level playing field. -The government should institute a minimum wage. -The government should limit regulations and social programs in order to increase the efficiency of the market. -The government should create safety net programs to assist those workers who lose their jobs.

The government should limit regulations and social programs in order to increase the efficiency of the market.

Which of the following is not a policy measure for addressing unemployment? -Changes in education policy to increase access to higher education. -Moderate level of economy-wide inflation to relieve "sticky wage" unemployment. -Increased investment in infrastructure projects by the government. -Investment by businesses in retraining their workers to respond to changes in technology. -Transition to a more capital-intensive production process to increase productivity.

Transition to a more capital-intensive production process to increase productivity.

Which of the following are possible explanations for the existence of sticky wages in the real world? -Employers may be slow to reduce wages because they fear worker unrest. -Wages can be set at particular level by long-term contracts. -Employers may pay workers efficiency wages. -None of the above -All of the above

all of the above

According to the Classical labor market model, a minimum wage above the equilibrium wage will result in ... -no change in employment -an increase in the size of the labor force -a decrease in the number of discouraged workers -an increase in employment -an increase in unemployment

an increase in unemployment

Which one of the following groups is included in the Bureau of Labor Statistics definition of unemployed workers? -None of the above -Incarcerated persons -Active duty personnel in the military -Discouraged workers -Marginally attached workers

none of the above

Suppose a 50-year old, non-institutionalized civilian is not looking for a job, and is considered by the U.S. Bureau of Labor Statistics to be a "discouraged worker". Which other BLS category would this person belong to? -Unemployed -Underemployed -Not in the labor force -Employed -Not surveyed

not in the labor force