Econ 202 Quiz 4

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%

Unemployment that occurs because it takes workers and employees time to find each other is called:

frictional unemployment

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:

frictional unemployment.

An example of structural unemployment is a(n):

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:

increase

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:

140 million

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

2.2%

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%

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

5%

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 rises to 28.6%.

Which of the following statements is false?

Unemployment always falls during expansions.

To be counted as unemployed, one must:

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

Deviations from the natural rate of unemployment are known as:

cyclical unemployment.

The official unemployment rate reported by the government may tend to understate the amount of unemployment by:

excluding discouraged workers who are not actively seeking employment.

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 fall

When the economy is in full employment,

only cyclical unemployment is zero.

An example of frictional unemployment is a(n):

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:

structural unemployment.

The labor force is:

the total of people employed and unemployed

Unemployment rates are usually higher in Europe than in the United States because:

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