Economics Chapter 9 HW

Which of the following is not one of the conditions someone needs to meet to be counted as​ unemployed? A. They had worked only one hour per week during the previous four weeks. B. They were available for work in the week previous to the survey week. C. They must not have worked in the week previous to the survey week. D. They had actively looked for work at some time during the previous four weeks.

A. They had worked only one hour per week during the previous four weeks.

What index is used to measure the average prices paid by a typical​ family? An average of the prices of the goods and services purchased by a typical family is​ the: A. consumer price index​ (CPI). B. inflation rate index. C. aggregate price level index. D. producer price index​ (PPI).

A. consumer price index (CPI)

When an unemployed person drops out of the labor​ force, it A. does not affect the​ employment-population ratio. B. does not affect the labor force participation rate. C. does not affect the unemployment rate. D. affects the​ employment-population ratio.

A. does not affect the employment-population ratio

The three types of unemployment are A. ​frictional, structural, and cyclical unemployment. B. full, frictional, and involuntary unemployment. C. voluntary, structural, and cyclical unemployment. D. ​natural, unnatural, and cyclical unemployment.

A. frictional, structural, and cyclical unemployment.

The type of unemployment most likely to result in hardship for the people who are unemployed is A. structural because this type of unemployment requires retraining to acquire new job skills. B. cyclical because people have to wait for a recession to end. C. cyclical and frictional because these two types are closely related. D. frictional because people need to find a new job in the labor market.

A. structural because this type of unemployment requires retraining to acquire new job skills.

Currently, the Bureau of Labor Statistics does not include homemakers in its employment and labor force totals. What would happen to the unemployment rate and the labor force participation rate if homemakers were included in these​ numbers? A. Both the unemployment rate and the labor force participation rate would increase. B. The unemployment rate would decrease and the labor force participation rate would increase. C. The unemployment rate would increase and the labor force participation rate would decrease. D. Both the unemployment rate and the labor force participation rate would decrease.

B. Both the unemployment rate and the labor force participation rate would increase

Which of the following categories make up about​ three-quarters of the market​ basket? A. housing, medical​ care, and education B. housing, transportation, and food C. medical​ care, recreation and food D. medical​ care, housing, and food

B. housing, transportation, and food

An efficiency wage A. has no impact whatsoever on the unemployment rate. B. increases the unemployment rate since firms pay a​ higher-than-market wage that increases the quantity of labor supplied. C. decreases the unemployment rate since it increases the labor productivity. D. decreases the unemployment rate since firms pay a​ lower-than-market wage that decreases the quantity of labor supplied.

B. increases the unemployment rate since firms pay a higher-than-markey wage that increases the quantity of labor supplied.

All of the following are problems in measuring the unemployment rate except that A. lack of verification of​ people's responses in the household survey. B. people on active military service are included as unemployed. C. part-time workers are included as employed. D. discouraged workers are not included in the labor force.

B. people on active military service are included as unemployed

The​ employment-population ratio measures the A. percentage of the working age population that is in the labor force. B. percentage of the working age population that is employed. C. portion of the total population that is employed. D. percentage of the working age population that is not employed.

B. percentage of the working age population that is employed

Why do economists believe that setting a goal of zero percent unemployment is not feasible or​ desirable? Creating a goal of zero percent unemployment for an economy is not feasible nor is it desirable because A. the economy always experiences cyclical unemployment even if the economy were operating at the​ full-employment level of output. B. the economy needs some​ short-term unemployment in order to allow for better matching of jobs with workers that possess the proper skill sets. C. many people retire each year and therefore they become unemployed making changes to the unemployment rate. D. workers lose jobs due to changes in output of goods and services in the economy.

B. the economy needs some short-term unemployment in order to allow for better matching of jobs with workers that possess the proper skill sets.

A politician makes the following​ argument: ​"The economy would operate more efficiently if frictional unemployment were eliminated.​ Therefore, a goal of government policy should be to reduce the frictional rate of unemployment to the lowest possible​ level." Eliminating all frictional unemployment A. will not be good for the economy since the presence of frictional unemployment decreases job creation. B. will not be good for the economy since the presence of frictional unemployment increases economic efficiency. C. will be good for the economy since the presence of frictional unemployment increases job destruction. D. will be good for the economy because the total unemployment will fall.

B. will not be good for the economy since the presence of frictional unemployment increases economic efficiency.

In the U.S. economy in​ mid-2013, the average period of unemployment was A. 4 months. B. 6 months. C. 9 months. D. less than 3 months.

C. 9 months.

The price index which is used to measure changes in the cost of living is the A. Producer Price Index​ (PPI). B. Retail Price Index. C. Consumer Price Index​ (CPI). D. GDP Deflator

C. Consumer Price Index (CPI).

The minimum wage law A. has a significant effect on the unemployment rate since a large part of the labor force earns the minimum wage. B. increases cyclical unemployment in the economy. C. has only a small effect on the unemployment rate since only a small part of the labor force earns the minimum wage. D. increases the unemployment rate among highly skilled workers.

C. has only a small effect on the unemployment rate since only a small part of the labor force earns the minimum wage.

The unemployment rate A. is the amount of the labor force that is not working. B. shows the percentage of the population that is considered unemployed. C. shows the percentage of the labor force that is considered unemployed. D. is the amount of people in the population that are not working.

C. shows the percentage of the labor force that is considered unemployed.

When the economy is at full​ employment, unemployment is equal to A. cyclical unemployment minus seasonal unemployment B. normal rate of unemployment minus abnormal rate of unemployment. C. the natural rate of unemployment. D. zero.

C. the natural rate of unemployment.

When an unemployed person drops out of the labor​ force, the unemployment rate A. overstates the true degree of joblessness in the economy. B. becomes more reliable as all the potential erroneous data are removed. C. understates the true degree of joblessness in the economy. D. is not affected by the existence of such workers.

C. understates the true degree of joblessness in the economy

The extent of job creation and job destruction is A. a serious shortcoming of our economic system. B. an ideal feature of our​ economy, because very few jobs are ever destroyed yet many new jobs are created. C. what we would expect in a vibrant market system. D. the main reason why the U.S. unemployment rate is persistently high.

C. what we would expect in a vibrant market system.

In​ 1914, Henry Ford increased the wage he paid workers in his car factory in​ Dearborn, Michigan to​ $5 per day. This wage was more than twice as much as other car manufacturers were paying. Ford was quoted as​ saying: ​"The payment of five dollars a day for an​ eight-hour day was one of the finest​ cost-cutting moves we ever​ made." Giving workers a raise can result in overall lower costs for a firm if A. the firm cuts benefits less than the amount of the raise. B. workers use their extra money to buy the products from the firm. C. workers are motivated by higher wages to work harder. D. the firm receives goodwill from the community resulting in more workers.

C. workers are motivated by higher wages to work harder.

Which of the following causes changes in the CPI to overstate the true inflation​ rate? A. Substitution bias B. Increase in quality bias C. New product bias D. All of the above

D. All of the above

When the economy is at full​ employment, A. the unemployment rate is greater than zero. B. the natural rate of unemployment prevails. C. all remaining unemployment is either frictional or structural. D. All of the above.

D. All of the above.

Which one of the following accurately describes the relationship between frictional unemployment and job​ search? A. People are said to be frictionally unemployed when they are between jobs due to the seasonal variations. B. People are said to be frictionally unemployed when they are laid off because of a recession. C. People are said to be frictionally unemployed when their skills do not match job requirements. D. People are said to be frictionally unemployed when they are between jobs and searching for new jobs.

D. People are said to be frictionally unemployed when they are between jobs and searching for new jobs.

Which of the following steps has not been taken by the Bureau of Labor Statistics​ (BLS) to reduce the size of the biases in the​ CPI? A. The BLS has reduced the size of the outlet bias by conducting a​ point-of-purchase survey to track where consumers make their purchases. B. The BLS has reduced the size of the substitution bias and the new product bias by updating the market basket every two years instead of every ten years. C. The BLS has used statistical methods to reduce the size of the quality bias. D. The BLS has expanded the number of stores from which it collects the price information to reduce the coverage bias.

D. The BLS has expanded the number of stores from which it collects the price information to reduce the coverage bias.

The natural rate of unemployment is A. the sum of structural unemployment and cyclical unemployment. B. the sum of seasonal unemployment and cyclical unemployment. C. the sum of cyclical unemployment and frictional unemployment. D. the sum of structural unemployment and frictional unemployment.

D. the sum of structural unemployment and frictional unemployment.

Which of the following is not considered one of the potential biases in calculating the consumer price​ index? A. Substitution bias. B. Outlet bias. C. Increase in quality bias. D. New product bias. E. Coverage bias.

E. Coverage bias.

_______________ is the percentage of the​ working-age population in the labor force.

The labor force participation rate

When a company reduces production and employment during economic​ recessions, those employees who lose their jobs are generally considered to be

cyclically unemployed

CPI

expenditures (cost) in the current year/ expenditures (cost) in the base year

A person who is in between jobs but actively engaged in a job search is considered to be

frictionally unemployed

If the length of time workers are eligible to receive unemployment insurance payments doubles​, then the unemployment rate will

increase

The effect of labor unions on overall unemployment is ________________ since only a _______________ percentage of the labor force outside the government is unionized.

small; small

Experts in​ hand-drawn animation who remain unemployed due to the film​ industry's switch to​ computer-generated animation are considered to be

structurally unemployed

When there are workers that drop out of the labor force​, the official BLS measure of the unemployment rate ____________ the true degree of unemployment.

understates