Macro Exam 3

34. Suppose that consumers decide to walk to work more frequently and drive cars less. Companies that make walking shoes hire workers, while automobile companies lay off workers. This is an example of a) frictional unemployment created by sectoral shifts. b) frictional unemployment created by efficiency wages. c) structural unemployment created by efficiency wages. d) structural unemployment created by sectoral shifts.

a) frictional unemployment created by sectoral shifts.

51. Labor unions a) raise wages in unionized industries b)create labor shortages in non-unionized industries c) play a larger role in the current U.S. economy than in European countries such as Norway and Sweden d) prefer to operate in states with right-to-work laws

a) raise wages in unionized industries

42. If a price floor is not binding, then a) the equilibrium price is above the price floor. b) the equilibrium price is below the price floor. c) there will be a surplus in the market. d) there will be a shortage in the market.

a) the equilibrium price is above the price floor.

8. Esmerelda worked part-time for her mother's business without pay. Tabitha was absent from work because she had strep throat. Who is counted as "employed" by the Bureau of Labor Statistics? a) Esmerelda but not Tabitha b) Tabitha but not Esmerelda c) both Esmerelda and Tabitha d) neither Esmerelda nor Tabitha

b) Tabitha but not Esmerelda

1. An economy's natural rate of unemployment is the a) economy's long-run target level of unemployment. b) amount of unemployment that the economy normally experiences. c) lowest rate of unemployment the economy can achieve. d) All of the above are correct.

b) amount of unemployment that the economy normally experiences.

19. If an unemployed person quits looking for work, then, eventually the unemployment rate a) decreases, and the labor-force participation rate is unaffected. b) and the labor-force participation rate both decrease. c) is unaffected, and the labor-force participation rate decreases. d) and the labor-force participation rate are both unaffected.

b) and the labor-force participation rate both decrease.

38. Of the following groups, who is eligible for unemployment insurance benefits? a) the unemployed who quit their jobs b) the unemployed who were laid off because their previous employers no longer needed their skills c) the unemployed who were fired for cause d) the unemployed who just entered the labor force

b) the unemployed who were laid off because their previous employers no longer needed their skills

39. Wanda quit her job because she was unhappy at work. Arnold was fired from his landscaping job because his company was downsizing. Who is eligible for unemployment insurance benefits? a) both Wanda and Arnold b) Wanda but not Arnold c) Arnold but not Wanda d) neither Wanda nor Arnold

c) Arnold but not Wanda

26. Over the past several decades, the difference between the labor-force participation rates of men and women in the U.S. has a) gradually increased. b) remained constant. c) gradually decreased. d) been eliminated.

c) gradually decreased.

28. The Bureau of Labor Statistics counts discouraged workers as a) employed. Including them as employed makes the unemployment rate lower than otherwise. b) unemployed. Including them as unemployed makes the unemployment rate higher than otherwise. c) out of the labor force. If they were counted as unemployed the unemployment rate would be higher. d) None of the above is correct.

c) out of the labor force. If they were counted as unemployed the unemployment rate would be higher.

7. Who of the following is not included in the Bureau of Labor Statistics' "employed" category? a) those who worked in their own business b) those who worked as unpaid workers in a family member's business c) those waiting to be recalled to a job from which they had been laid off d) those who were temporarily absent from work because of vacation.

c) those waiting to be recalled to a job from

20. In June 2009 the Bureau of Labor Statistics reported an adult population of 234.9 million, a labor force of 154 million and employment of 141.6 million. Based on these numbers the unemployment rate was a) 93.3/234.9. b) 12.4/234.9. c) 93.3/154. d) 12.4/154.

d) 12.4/154.