QUIZ 5: Ch.8 Unemployment

The natural unemployment rate includes Answers:a. both frictional and structural unemployment. b. neither frictional nor structural unemployment. c. structural, but not frictional unemployment. d. frictional, but not structural unemployment.

Selected Answer:a. both frictional and structural unemployment.

More generous unemployment insurance would Answers:a. raise the natural rate of unemployment. b. raise cyclical unemployment. c. lower the natural rate of unemployment. d. lower cyclical unemployment.

Selected Answer:a. raise the natural rate of unemployment.

Suppose some country had an adult population of about 50 million, a labor-force participation rate of 60 percent, and an unemployment rate of 5 percent. How many people were employed? Answers:a. 1.5 million b. 28.5 million c. 30 million d. 47.5 million

Selected Answer:b. 28.5 million

Suppose that some people are counted as unemployed when, to maintain unemployment compensation, they search for work only at places where they are unlikely to be hired. If these individuals were counted as out of the labor force instead of as unemployed, then Answers:a. both the unemployment rate and labor-force participation rate would be higher. b. both the unemployment rate and labor-force participation rate would be lower. c. the unemployment rate would be lower and the labor-force participation rate would be higher. d. the unemployment rate would be higher and the participation rate would be lower.

Selected Answer:b. both the unemployment rate and labor-force participation rate would be lower.

Which of the following does not create unemployment by keeping wages above the equilibrium level? Answers:a. efficiency wages b. job search c. minimum-wage laws d. unions

Selected Answer:b. job search

The labor force equals the Answers:a. number of people employed. b. number of people employed plus the number of people unemployed. c. number of people employed plus the number of people unemployed plus teenagers between ages 14 and 16 who work at least 10 hours a week. d. adult population.

Selected Answer:b. number of people employed plus the number of people unemployed.

Cyclical unemployment is closely associated with Answers:a. long-term economic growth. b. short-run ups and downs of the economy. c. fluctuations in the natural rate of unemployment. d. changes in the minimum wage.

Selected Answer:b. short-run ups and downs of the economy.

Unemployment data are collected Answers:a. from unemployment insurance claims. b. through a regular survey of about 60,000 households. c. through a regular survey of about 200,000 firms. d. using all of the above.

Selected Answer:b. through a regular survey of about 60,000 households.

Refer to Table 28-3 below. What is the adult male labor-force participation rate in Meditor? Answers:a. 37 percent b. 63 percent c. 66.7 percent d. 96.3 percent

Selected Answer:c. 66.7 percent

Suppose that a large number of men who used to work or seek work now no longer do either. Other things the same, this makes Answers:a. the number of people unemployed rise but does not change the labor force. b. the number of people unemployed rise but makes the labor force fall. c. both the number of people unemployed and the labor force fall. d. the number of people unemployed fall but does not change the labor force.

Selected Answer:c. both the number of people unemployed and the labor force fall.

Frictional unemployment is Answers:a. not inevitable; rather, it can be reduced to zero by well-designed public policies. b. not inevitable; rather, it could be reduced to zero if by the elimination of unemployment insurance. c. inevitable, because at any given time, jobs are being created in some firms and destroyed in other firms. d. inevitable, because in some industries, wages are always set above the level that brings supply and demand into equilibrium.

Selected Answer:c. inevitable, because at any given time, jobs are being created in some firms and destroyed in other firms.

Unemployment that exists because some people lack the skills valued by the labor market is Answers:a. frictional unemployment, which contributes to the natural rate of unemployment. b. frictional unemployment, which does not contribute to the natural rate of unemployment. c. structural unemployment, which contributes to the natural rate of unemployment. d. structural unemployment, which does not contribute to the natural rate of unemployment.

Selected Answer:c. structural unemployment, which contributes to the natural rate of unemployment.

When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the result is a Answers:a. shortage of labor and a shortage of jobs. b. shortage of labor and a surplus of jobs. c. surplus of labor and a shortage of jobs. d. surplus of labor and a surplus of jobs.

Selected Answer:c. surplus of labor and a shortage of jobs.

Which of the following is not one of the categories into which the Bureau of Labor Statistics places each adult of each surveyed household? Answers:a. employed b. unemployed c. underemployed d. not in the labor force

Selected Answer:c. underemployed

According to recent data on the U.S. population, which of the following groups has the highest unemployment rates? Answers:a. young and white b. old and white c. young and black d. old and black

Selected Answer:c. young and black

Refer to Table 28-3 below. What is the adult male population in Meditor? Answers:a. 50 million b. 90 million c. 130 million d. 135 million

Selected Answer:d. 135 million

A firm may pay efficiency wages in an attempt to Answers:a. reduce incentives to shirk. b. reduce turnover. c. attract a well-qualified pool of applicants. d. All of the above are correct.

Selected Answer:d. All of the above are correct.

A person who is counted as unemployed by the Bureau of Labor Statistics Answers:a. is also in the labor force. b. must have recently looked for work or be on temporary layoff. c. must be at least 16 years old. d. All of the above are correct.

Selected Answer:d. All of the above are correct.

Bob is looking for work after school, but everywhere he fills out an application, the managers say they always have a lot more applications than open positions. Tom has a law degree. Several firms have made him offers, but he thinks he might be able to find a firm where his talents could be put to better use. Answers:a. Bob and Tom are both frictionally unemployed. b. Bob and Tom are both structurally unemployed. c. Bob is frictionally unemployed, and Tom is structurally unemployed. d. Bob is structurally unemployed, and Tom is frictionally unemployed.

Selected Answer:d. Bob is structurally unemployed, and Tom is frictionally unemployed.

Measuring unemployment is the job of the Answers:a. Congressional Budget Office. b. Department of Commerce. c. Council of Economic Advisers. d. Bureau of Labor Statistics.

Selected Answer:d. Bureau of Labor Statistics.

Who of the following would necessarily be included in the Bureau of Labor Statistics' "unemployed" category? Answers:a. Anique, who did not work during the previous 4 weeks b. Evelien, who was working but also tried to find new employment during the previous 4 weeks c. Renate, who was an unpaid worker during the previous 4 weeks d. None of the above is correct.

Selected Answer:d. None of the above is correct.

Refer to Table 28-1 below. The labor-force participation rate of Wrexington Answers:a. increased from 2004 to 2005 and increased from 2005 to 2006. b. increased from 2004 to 2005 and decreased from 2005 to 2006. c. decreased from 2004 to 2005 and increased from 2005 to 2006. d. decreased from 2004 to 2005 and decreased from 2005 to 2006.

Selected Answer:d. decreased from 2004 to 2005 and decreased from 2005 to 2006.

Unemployment that results because some people are searching for jobs is called Answers:a. the natural rate of unemployment. b. cyclical unemployment. c. structural unemployment. d. frictional unemployment.

Selected Answer:d. frictional unemployment.

Which of the following is an explanation for the existence of frictional unemployment? Answers:a. efficiency wages b. minimum-wage laws c. unions d. job search

Selected Answer:d. job search

Shannon is a full-time homemaker not currently searching for paid work. Noah is a full-time student who is not looking for a job. Who is included in the labor force by the Bureau of Labor Statistics? Answers:a. only Shannon b. only Noah c. both Shannon and Noah d. neither Shannon nor Noah

Selected Answer:d. neither Shannon nor Noah