Macro Set 5
The unemployment rate i the
% of the labor force that does not have a job
Unemployment rate equals
(# of people unempoloyed/ labor force) x 100
During the Great Depression, the unemployment rate rose to a maximum of
25%
The highest unemployment rate in US history was about
25% in 1933
Unemployment in the past 60 years have risen and fallen between what percents?
4% - 10%
The average US employment rate from 1948 has been about
5.8 percent
Which of the following is true? A) Real GDP fluctuates around potential GDP. B) Potential GDP fluctuates around real GDP. C) Nominal GDP fluctuates around real GDP. D) Real GDP fluctuates around nominal GDP. E) When real GDP equals potential GDP, both equal nominal GDP.
A
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
Which of the following statements are true concerning the labor force participation rate? i) The labor force participation rate for women in the United States has increased since 1959. ii) The labor force participation rates for women across different countries have converged to about 50 percent. iii) The labor force participation rate for men in the United States has decreased since 1959. A) i and ii B) i, ii and iii C) i and iii D) iii only E) i only
C
A marginally attached worker i) does not have a job and has not looked for one in the last month. ii) is available and willing to work. iii) must work at least 1 hour per week. A) iii only B) ii only C) ii and iii D) i and ii E) i only
D
The labor force includes people who i. are less than 16 years of age. ii. are in institutions. iii. are actively seeking a job but do not have a job. A) i only B) i and iii C) i and ii D) iii only E) i, ii, and iii
D
Julie works part-time for economic reasons. She would be considered
an involuntary part-time worker
The labor force is defined as the number of people who
are employed plus the number of people who are unemployed
The natural unemployment rate occurs
at the full employment level of unemployment.
When the unemployment rate is ________ the natural unemployment rate, real GDP is ________ potential GDP.
below; above
When the unemployment rate is ________ the natural unemployment rate, real GDP is ________.
below; above potential GDP
During the Great Depression of the 1930s when the unemployment rate was exceptionally high due to the Great Depression, the government had employment programs, such as the Civilian Conservation Corps, which built campsites and planted trees. These programs were aimed at reducing which type of unemployment?
cyclical
John has been laid off from his job because of a general downturn in the economy. John's unemployment is best classified as
cyclical
At full employment there is no
cyclical employment
At full employment, there is no
cyclical unemployment
The natural unemployment rate is the unemployment rate that exists when there is no
cyclical unemployment
The type of unemployment that arises from a decrease in real GDP is called
cyclical unemployment
Full employment occurs when
cyclical unemployment is zero
What lowers fricitonal unemployment?
decreasing unemployment benefits
Involuntary part-time workers are not working more hours due to
economic reasons
If KeKe, age 32, worked 12 hours as a paid employee the week before the Current Population Survey, KeKe is classified in the Current Population Survey as ________ when calculating the unemployment rate.
employed
Potential GDP is the level of output produced when the unemployment rate is
equal to the natural unemployment rate
Which type of unemployment is a permanent and healthy phenomenon in a dynamic economy?
frictional
Natural unemployment equals the sum of
frictional and structural unemployment
As firms search for the best employee to fill an opening and the unemployed search for the job that best fits their skills, the economy experiences
frictional unemployment
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
frictionally unemployed
Since 1960, the labor force participation rate in the United States
has generally increased
Rob is considered unemployed in the Current Population Survey if he
has looked for a job in the last four weeks but has not found a job
Over the past 2 decades, the unemployment rates in Eurozone have been ______ than in US
higher
People over the age of 16 with full-time jobs are considered to be
in the labor force and employed
The natural unemployment rate
includes only frictional and structural unemployment.
An increase in unemployment benefits ________ and an increase in international competition that changes the location of jobs ________.
increases frictional unemployment; increases structural unemployment
During a recession, the percentage workers who are part time for economic reasons
increases more rapidly than the percentage of part-time workers
The unemployment rate generally _______ during recessions and generally ______ during expansions
increases; decreases
The number of part-time workers for economic reasons ________ during recessions and the number of part-time workers for noneconomic reasons ________ during recessions
increases; does not change
The labor force participation rate is the
labor force divided by the working-age population, then multiplied by 100.
When the unemployment rate is greater than the natural unemployment rate, real GDP is
less than potential GDP
In the United States, a reason for the increase of the labor force participation rate for women is that
more women pursued a college education and received higher wages upon graduation.
T or F: Labor Force participation rate for women has increased near to 60% over the past 50 years in US
True
To be considered unemployed, a worker must have had
no employment during the week before the survey and be actively looking for ajob
Frictional unemployment is a result of
normal labor market turnover
The labor forice is the
number of employed people plus the number of unemployed people
A main reason for the low unemployment rate from 95 to 00 was because of
rapid development of the Internet industry and other new technologies.
As the unemployment rate increases,
real GDP decreases
If the unemployment rate is less than the natural unemployment rate, then
real GDP is greater than potential GDP
During a recession,
real GDP is less than potential GDP
During a recession the unemployment rate generally ________ and during an expansion the unemployment rate generally ________.
rises; falls
After the passage of the North American Free Trade Agreement, which made it less expensive to import goods from Mexico, workers in some industries found their factories being relocated to Mexico to take advantage of lower labor costs. These workers experienced what type of unemployment?
strucutal
Structural unemployment is the result of
technological change or foreign competition
Structural unemployment includes people who become unemployed from
technological changes
At full employment there still exists some unemployment because
the US economy is constantly creating and destroying jobs
Frictional unemployment is the result of
the normal process of jobs being created and destroyed
The natural unemployment rate is
the unemployment rate that is not associated with the business cycle
In 2011, real GDP in the United States was below potential GDP. This fact definitely means that
the unemployment rate was above the natural unemployment rate
Potential GDP is reached when
there is no cyclical unemployment
When the economy is at full employment,
there is no cyclical unemployment
Full employment occurs when the
unemployment rate equals the natural unemployment rate.
At the peak of a business cycle,
unemployment rate is below the natural unemployment rate
The natural unemployment rate is known
with no certainty
If real GDP exceeds potential GDP, then the unemployment rate ________ the natural unemployment rate.
is less than
Producing an amount of GDP equal to potential GDP is most consistent with the economy producing
on the PPF
Unemployment rate measures the % of
people in the labor force who can't find a job
If an entire industry relocates to a foreign country, the relocation leads to ahigher rate of _________ unemployment
structual
If the Federal government expands its support of education and retraining of workers who have been unemployed for a relatively long length of time, which type of unemployment would the education and retraining most likely be targeted?
structual
In 2008 as the economy moved into a recession,
cyclical unemployment increased
he women's labor force participation rate is
higher in the US than in France
In order to obtain the data used to calculate the unemployment rate, the Bureau of Labor Statistics
uses a survey from 60,000 households
Part time workers are defined as people who are working less than
35 hours a week
Over the last 50 years, in the United States the labor force participation rate for women ________, the labor force participation rate for men ________, and the over-all labor force participation rate ________. A) increased; decreased; increased B) increased; decreased; did not change C) did not change; increased; increased D) increased; did not change; increased E) decreased; increased; increased
A
Rosina Gonzales quit her job in Pennsylvania and moved to California to be close to her family. She is currently looking for work, so she would be considered
frictionally unemployed
The unemployment rates during the last 10 years in the Eurozone was
generally higher than US unemployment rate
Since 1980 the percentage of part-time workers who are part time for economic reasons
generally increased in recessions and decreased in expansions
Labor force participation in US since 1960 has _____ for women and ______ for men
increased; decreased
Countries with higher than average unemployment rates have ________ compared to the United States.
more generous unemployment benefits and more regulated labor markets
If Jose is 22-years old, is available to work but does not have a job and made no specific efforts to find a job for the previous month, Jose is classified in the Current Population Survey as
not in the labor force
f Jose is 22-years old, is available to work but does not have a job and made no specific efforts to find a job for the previous month, Jose is classified in the Current Population Survey as
not in the labor force
Bo is available and willing to work but has not actively looked for work in the past month. Bo is ________ of the labor force and is ________.
not part; not counted as unemployed
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.
not unemployed; not part of; part of
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
part of the labor force and employed
During a recession, the unemployment rate ________ and the percentage of part-time workers who are involuntary part-time workers ________.
rises; rises
An employee who is fired from his or her job because he or she lacks the skills required to accomplish the task, is part of ________ unemployment.
structual
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?
structual
During 2009, General Motors announced that it would close its Saturn facilities in the United States because of the foreign competition it faced. This corporate move
structural unemployment
If a significant number of part-time workers successfully find full-time employment, then
the unemployment rate will fall and the labor force participation rate will increase
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
unemployed
Higher ________ in Canada than in the United States help explain why ________ unemployment is higher in Canada than in the United States.
unemployment benefits; frictional
In 2008 as the recession worsened, suppose discouraged workers were included as part of the unemployment rate. Which of the following would have occurred?
unemployment would have increased
During a recession, the unemployment rate
usually increases but not necessarily to 10% or 25%
Which type of unemployment is most likely to lead unemployed workers to retrain or relocate?
structual
part, the increase in the labor force participation rate in the United States over the last 50 years can be attributed to
technological change in the home increasing the time available for paid employment
Which of the following statements is true regarding part-time workers?
Part-time workers are divided those who voluntary choose part-time work and those who work part-time due to economic reasons.
A marginally attached worker is
a worker who does not have a job but is available and wants one but has not made any efforts to find a job in the 4 previous weeks
The ongoing normal creation and destruction of jobs creates
frictional unemployment
The total labor force participation rate in United States has overall _____ in the past 50 years
increased
The Bureau of Labor Statistics (BLS) compiles information about employment by
performing am monthly survey of 60,000 households
Between 1960 and 2010, labor force participation rate for women
increased until 1996
Involuntary part-time workers are workers who
work less than 35 hours but would like to work more
The total U.S. labor force participation rate increased over the past 50 years because A) the female labor force participation rate increased. B) more men are retiring early. C) fewer women are attending college. D) many blue-collar jobs with rigid work hours have been created in the last decade. E) the male labor force participation rate increased.
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
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
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
Cyclical unemployment includes people who become unemployed from
Changes in the business cycle
The upward trend in the U.S. labor force participation rate the the past 50 years is explained by A) the increase in the population. B) the increase in the male labor force participation rate. C) the increase in the number of discouraged workers. D) the increase in the female labor force participation rate. E) Both answers B and D are correct.
D
Which of the following help explain the increase in the U.S. labor force participation rate for women? i. There was a significant fall in the number of children women were choosing to have. ii. There was an increase in the educational level of women. iii. Technological change in the home increased the time available for work outside the home. A) i only B) ii only C) i and ii D) ii and iii E) i, ii, and iii
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
hich of the following correctly describes "frictional unemployment"?
Frictional unemployment is a normal occurrence in a growing economy.
________ unemployment changes slowly and depends on ________.
Frictional; the rate at which people enter and exit the labor force
Across developed and newly industrialized economies, since 1989 the United States has generally had
a higher unemployment rate than Japan and Hong Kong and a lower unemployment rate than the Eurozone countries.
Structural unemployment usually lasts ________ period of time frictional unemployment
a longer
Cyclical unemployment is caused by
a recession
The working-age population of people over the age of 16 can be divided into 2 groups. People that
are in the labor force and people who are not in the labor force
To be counted as employed by the BLS, in the week before the survey the person must have worked for pay ________.
at least 1 hour
Janae was fired from her job with Microsoft in the 2008-09 recession because Microsoft's sales dipped. Janae's unemployment would be best classified as
cyclical
Which type of unemployment is the consequence of downturns in the business cycle?
cyclical
A reduction in unemployment benefits will
decrease frictional unemployment
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 ________.
decreased; less than ;increased; increased
The amount of frictional unemployment depends on
demographic factors and unemployment beneftis
People who are willing and able to work but are not looking for work because they have been discouraged by their previous futile efforts are called
discouraged workers
A weakness that could be noted about the unemployment rate is that it
does not account for underutilized of workers
In the Current Population Survey, a person is considered unemployed if the person
does not have a job and is actively looking for a job
Jane is 25 years old, full-time student. She works part time in her school librart and is paid $7 an hour. She is considered
employed
Suppose a 23-year old graduate student is looking for a full-time job , but has to take a part-time job instead. He or she will be categorized in the Current Population Survey as ________ when calculating the unemployment rate.
employed
The working-age population includes
employed and unemployed people over the age of 16
An unpaid worker in a family business is classified as
employed if the person worked at least 15 hours in the previous week
The purpose of the Current Population Survey is to determine the
employment status of the population
Unemployment benefits in western Europe are more generous than in the United States. As a result, ________ in the United States.
frictional unemployment is lower