Question 1

What is the likely consequence of an unemployment rate falling below the rate at which "full employment" is achieved?

Accepted Answer

A) The threat of recession. 
B) Increased inflationary pressures. 
C) An increase in discouraged workers. 
D) None of the choices are correct. 
A) The threat of recession. 
B) Increased inflationary pressures. 
C) An increase in discouraged workers. 
D) None of the choices are correct. B

Question 2

Which of the following groups typically has the highest unemployment rate?

Accepted Answer

A) White teenagers. 
B) Black adults. 
C) White adult females. 
D) Black teenagers. 
A) White teenagers. 
B) Black adults. 
C) White adult females. 
D) Black teenagers. D

Question 3

The number of unemployed can drop simultaneously with increases in the unemployment rate.

Accepted Answer

A) True 
 B)False  True

Question 4

Long-term changes in demand that make some goods obsolete (possibly due to technological advancement)are likely to have their greatest impact on

Accepted Answer

A) Structural unemployment. 
B) Cyclical unemployment. 
C) Frictional unemployment. 
D) Seasonal unemployment. 
A) Structural unemployment. 
B) Cyclical unemployment. 
C) Frictional unemployment. 
D) Seasonal unemployment.

Question 5

Table 6.3: Population and Labor Force $\begin{array} { | l | c | r | } 
\hline & \text { Year 1 } & \text { Year 5 } \
\hline \text { Working Age Population } & 200 \mathrm { million } & 250 \mathrm { million } \
\hline \text { Labor Force } & 110 \mathrm { milli } \mathrm { on } & 145 \mathrm { million } \
\hline \text { Employed } & 106 \mathrm { million } & 135 \mathrm { million } \
\hline
\end{array}$ What is the number of unemployed in Year 1 in Table 6.3?

Accepted Answer

A) 90 million. 
B) 94 million. 
C) 106 million. 
D) 4 million. 
A) 90 million. 
B) 94 million. 
C) 106 million. 
D) 4 million.

Question 6

In the Employment Act of 1946,Congress committed the federal government to pursue a goal of 0 percent unemployment and inflation.

Accepted Answer

A) True 
 B)False

Question 7

As a result of outsourcing,

Accepted Answer

A) Domestic workers may become more productive. 
B) Profits decrease for domestic companies. 
C) GDP definitely decreases. 
D) Unemployment must increase in the long run. 
A) Domestic workers may become more productive. 
B) Profits decrease for domestic companies. 
C) GDP definitely decreases. 
D) Unemployment must increase in the long run.

Question 8

Full employment in the U.S.economy means that

Accepted Answer

A) Frictional unemployment has been reduced to zero. 
B) The total unemployment rate has been reduced to zero. 
C) The economy has reached the lowest level of unemployment compatible with price stability. 
D) Structural unemployment has reached its minimum as a result of increased spending,and the economy is moving toward the peak of the business cycle. 
A) Frictional unemployment has been reduced to zero. 
B) The total unemployment rate has been reduced to zero. 
C) The economy has reached the lowest level of unemployment compatible with price stability. 
D) Structural unemployment has reached its minimum as a result of increased spending,and the economy is moving toward the peak of the business cycle.

Question 9

Suppose a country has 1 billion people.75 percent of its citizens are in the labor force,with 90 million unemployed.Full employment occurs at 2 percent.Based on this information,what is the unemployment rate?

Accepted Answer

A) 12.0 percent. 
B) 25.0 percent. 
C) 9.0 percent. 
D) 8.3 percent. 
A) 12.0 percent. 
B) 25.0 percent. 
C) 9.0 percent. 
D) 8.3 percent.

Question 10

When the growth rate of the labor force is faster than the growth rate of the unemployed,the unemployment rate is falling.

Accepted Answer

A) True 
 B)False

Question 11

Structural unemployment occurs when

Accepted Answer

A) Workers do not have the skills required to fill the vacant positions in the job market. 
B) Firms fail in the normal course of business activity. 
C) An industry experiences a seasonal downturn. 
D) There is inadequate demand for labor. 
A) Workers do not have the skills required to fill the vacant positions in the job market. 
B) Firms fail in the normal course of business activity. 
C) An industry experiences a seasonal downturn. 
D) There is inadequate demand for labor.

Question 12

The lowest level of unemployment compatible with price stability

Accepted Answer

A) Is referred to as full employment. 
B) Is estimated at between 0 and 2 percent unemployment. 
C) Allows for some cyclical unemployment. 
D) Is equal to the natural rate of unemployment plus the inflation rate. 
A) Is referred to as full employment. 
B) Is estimated at between 0 and 2 percent unemployment. 
C) Allows for some cyclical unemployment. 
D) Is equal to the natural rate of unemployment plus the inflation rate.

Question 13

Unemployment is defined as

Accepted Answer

A) The active search and inability of labor force participants to find jobs. 
B) The active search and inability of citizens to find jobs that utilize their capabilities. 
C) The proportion of the total population that is unemployed. 
D) A decrease in the labor force. 
A) The active search and inability of labor force participants to find jobs. 
B) The active search and inability of citizens to find jobs that utilize their capabilities. 
C) The proportion of the total population that is unemployed. 
D) A decrease in the labor force.

Question 14

The benefits to the United States of outsourcing include all of the following except

Accepted Answer

A) Foreign firms insource or send jobs to the United States. 
B) U.S.productivity rises,resulting in higher profits at U.S.firms that outsource. 
C) Higher domestic labor cost for U.S.firms. 
D) Greater domestic investment by U.S.firms that outsource. 
A) Foreign firms insource or send jobs to the United States. 
B) U.S.productivity rises,resulting in higher profits at U.S.firms that outsource. 
C) Higher domestic labor cost for U.S.firms. 
D) Greater domestic investment by U.S.firms that outsource.

Question 15

Which of the following would not increase the physical production possibilities curve?

Accepted Answer

A) Greater constraints for oil drilling companies. 
B) Increased availability of factors of production. 
C) Increased technology. 
D) None of the choices are correct. 
A) Greater constraints for oil drilling companies. 
B) Increased availability of factors of production. 
C) Increased technology. 
D) None of the choices are correct.

Question 16

If the population of a country is 250,000 people,its labor force consists of 145,000 people,35,000 people are unemployed,10,000 are unable to work,and 5,000 are unwilling to work,the unemployment rate is

Accepted Answer

A) 22.1 percent. 
B) 14.0 percent. 
C) 24.1 percent. 
D) 19.4 percent. 
A) 22.1 percent. 
B) 14.0 percent. 
C) 24.1 percent. 
D) 19.4 percent.

Question 17

Suppose a country has 10 million people.Three-fourths of those individuals are in the labor force,with 500,000 unemployed.Full employment occurs at 5 percent.Based on this information,what is the unemployment rate?

Accepted Answer

A) 6.67 percent. 
B) 75 percent. 
C) 7.5 percent. 
D) 5 percent. 
A) 6.67 percent. 
B) 75 percent. 
C) 7.5 percent. 
D) 5 percent.

Question 18

Which of the following government programs would be most appropriate to counteract cyclical unemployment?

Accepted Answer

A) Increased job placement services. 
B) Greater government expenditures to increase GDP. 
C) Year-round school. 
D) More job training programs. 
A) Increased job placement services. 
B) Greater government expenditures to increase GDP. 
C) Year-round school. 
D) More job training programs.

Question 19

According to Okun's Law,how does a 2 percent increase in unemployment affect the economy?

Accepted Answer

Okun's Law says that 1 percent more unem

Question 20

An unemployed worker who wants a job but has given up in the search for a new job is referred to as a/an

Accepted Answer

A) Unemployed worker. 
B) Phantom unemployed worker. 
C) Discouraged worker. 
D) Underemployed worker. 
A) Unemployed worker. 
B) Phantom unemployed worker. 
C) Discouraged worker. 
D) Underemployed worker.

Exam 6: Unemployment

What is the likely consequence of an unemployment rate falling below the rate at which "full employment" is achieved?

Which of the following groups typically has the highest unemployment rate?

The number of unemployed can drop simultaneously with increases in the unemployment rate.

Long-term changes in demand that make some goods obsolete (possibly due to technological advancement)are likely to have their greatest impact on

Table 6.3: Population and Labor Force Year 1 Year 5 Working Age Population 200 250 Labor Force 110 145 Employed 106 135 What is the number of unemployed in Year 1 in Table 6.3?

In the Employment Act of 1946,Congress committed the federal government to pursue a goal of 0 percent unemployment and inflation.

As a result of outsourcing,

Full employment in the U.S.economy means that

Suppose a country has 1 billion people.75 percent of its citizens are in the labor force,with 90 million unemployed.Full employment occurs at 2 percent.Based on this information,what is the unemployment rate?

When the growth rate of the labor force is faster than the growth rate of the unemployed,the unemployment rate is falling.

Structural unemployment occurs when

The lowest level of unemployment compatible with price stability

Unemployment is defined as

The benefits to the United States of outsourcing include all of the following except

Which of the following would not increase the physical production possibilities curve?

If the population of a country is 250,000 people,its labor force consists of 145,000 people,35,000 people are unemployed,10,000 are unable to work,and 5,000 are unwilling to work,the unemployment rate is

Suppose a country has 10 million people.Three-fourths of those individuals are in the labor force,with 500,000 unemployed.Full employment occurs at 5 percent.Based on this information,what is the unemployment rate?

Which of the following government programs would be most appropriate to counteract cyclical unemployment?

According to Okun's Law,how does a 2 percent increase in unemployment affect the economy?

An unemployed worker who wants a job but has given up in the search for a new job is referred to as a/an

Economics: the Core Issues

The Useconomy: a Global View

Supply and Demand

The Role of Government

National Income Accounting

Inflation

The Business Cycle

Aggregate Demand

Self-Adjustment or Instability

Fiscal Policy

Deficits and Debt

Money and Banks

The Federal Reserve System

Monetary Policy

Supply-Side Policy: Short-Run Options

Growth and Productivity: Long-Run Possibilities

Theory Versus Reality

Consumer Choice

Elasticity

The Costs of Production

The Competitive Firm

Competitive Markets

Monopoly

Oligopoly

Monopolistic Competition

Natural Monopolies: Deregulation

Environmental Protection

The Farm Problem

The Labor Market

Labor Unions

Financial Markets

Taxes: Equity Versus Efficiency

Transfer Payments: Welfare and Social Security

International Trade

International Finance

Global Poverty

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