Question 1

Unemployment caused by a recession is called:

Accepted Answer

A) frictional unemployment. 
B) cyclical unemployment. 
C) natural unemployment. 
D) structural unemployment. 
A) frictional unemployment. 
B) cyclical unemployment. 
C) natural unemployment. 
D) structural unemployment. B

Question 2

Cyclical unemployment:

Accepted Answer

A) includes structural unemployment. 
B) is generally greater than structural unemployment. 
C) is generally less than structural unemployment. 
D) can be reduced with demand side policies. 
A) includes structural unemployment. 
B) is generally greater than structural unemployment. 
C) is generally less than structural unemployment. 
D) can be reduced with demand side policies. D

Question 3

What happened to the duration of unemployment during the 2008/09 recession? What is the likely reason?

Accepted Answer

The duration of unemployment rose significantly during the 2008/09 recession.The likely reason is that fewer people were able to find a comparable job at comparable pay to the one they lost.The wage they desired was higher than the wage they would have to accept to the job.

Question 4

Structural unemployment is caused by:

Accepted Answer

A) a general downturn in the economy. 
B) people quitting a job just long enough to look for and find another one. 
C) people over 65 who don't really want to work. 
D) people losing a job when their skills become obsolete due to technological innovations. 
A) a general downturn in the economy. 
B) people quitting a job just long enough to look for and find another one. 
C) people over 65 who don't really want to work. 
D) people losing a job when their skills become obsolete due to technological innovations.

Question 5

Over the past several years, the target rate of unemployment has risen. Which of the following would not be used to explain this?

Accepted Answer

A) Congress passed a bill that requires the target rate to rise along with rising government deficits. 
B) The workforce is getting younger. 
C) More women have entered the workforce. 
D) Government has expanded income support programs. 
A) Congress passed a bill that requires the target rate to rise along with rising government deficits. 
B) The workforce is getting younger. 
C) More women have entered the workforce. 
D) Government has expanded income support programs.

Question 6

What would you expect unemployment insurance to do to the target unemployment rate?

Accepted Answer

One would expect unemployment

Question 7

What role has globalization played in increasing the target unemployment rate? What other factors have affected the target rate?

Accepted Answer

Globalization requires structural change

Question 8

Explain why truly entrepreneurial people can never be unemployed.

Accepted Answer

Truly entrepreneuria

Question 9

Should the unemployment rate be considered a normative or positive concept?

Accepted Answer

Any discussion of unemployment quickly b

Question 10

What would you expect to happen to potential output as reservation wages fall? Why?

Accepted Answer

As reservation wages fall,pote

Question 11

The jobs program suggested by the author was put forward in order to:

Accepted Answer

A) argue against the individual responsibility framework. 
B) argue against the social responsibility framework. 
C) provide a middle ground approach to solving the unemployment problem. 
D) sell a new book that he is publishing that deals with eliminating unemployment. 
A) argue against the individual responsibility framework. 
B) argue against the social responsibility framework. 
C) provide a middle ground approach to solving the unemployment problem. 
D) sell a new book that he is publishing that deals with eliminating unemployment.

Question 12

According to Okun's rule of thumb, if trend growth is 3 percent and the economy is producing at an annual rate of $7 trillion, if the rate of unemployment rises from 6 percent to 8 percent, income would be expected to:

Accepted Answer

A) fall by $140 billion. 
B) rise by $140 billion. 
C) fall by $70 billion. 
D) rise by $70 billion 
A) fall by $140 billion. 
B) rise by $140 billion. 
C) fall by $70 billion. 
D) rise by $70 billion

Question 13

With respect to the unemployment problem, social responsibility framework economists generally take the position that:

Accepted Answer

A) government should guarantee each person a satisfying and high-paying job. 
B) government should eliminate only frictional unemployment. 
C) each person should have a job commensurate with their training or past job experience. 
D) individuals should be responsible for finding their own jobs. 
A) government should guarantee each person a satisfying and high-paying job. 
B) government should eliminate only frictional unemployment. 
C) each person should have a job commensurate with their training or past job experience. 
D) individuals should be responsible for finding their own jobs.

Question 14

If a politician adheres to the individual responsibility framework, which of the following would not be mentioned in their campaign manifesto?

Accepted Answer

A) The unemployed are not looking hard enough for a job. 
B) The unemployed are too picky in their job requirements. 
C) The unemployed lack the entrepreneurial spirit. 
D) The unemployed deserve jobs at respectable wages. 
A) The unemployed are not looking hard enough for a job. 
B) The unemployed are too picky in their job requirements. 
C) The unemployed lack the entrepreneurial spirit. 
D) The unemployed deserve jobs at respectable wages.

Question 15

It can be argued that the minimum jobs proposal is preferable to a minimum wage law because:

Accepted Answer

A) it provides more job opportunities to women. 
B) it cannot be overturned by the federal government. 
C) it puts a floor on the wage as well as on the nature of the job. 
D) it applies to students and nonstudents. 
A) it provides more job opportunities to women. 
B) it cannot be overturned by the federal government. 
C) it puts a floor on the wage as well as on the nature of the job. 
D) it applies to students and nonstudents.

Question 16

According to Okun's rule of thumb, if trend growth is 2 percent and the economy is producing at an annual rate of $5 trillion, a decrease in the rate of unemployment from 7 percent to 6 percent would be expected to be associated with which of the following changes in income?

Accepted Answer

A) Income would fall by $100 billion. 
B) Income would rise by $100 billion. 
C) Income would fall by $200 billion. 
D) Income would rise by $200 billion. 
A) Income would fall by $100 billion. 
B) Income would rise by $100 billion. 
C) Income would fall by $200 billion. 
D) Income would rise by $200 billion.

Question 17

Someone who believes in the individual responsibility framework believes that the standard measure of unemployment underestimates the level of unemployment.

Accepted Answer

A) True 
 B)False

Question 18

In the United States, potential output in the long run tends to:

Accepted Answer

A) remain constant. 
B) rise at a trend rate of 2.25 to 3.5 percent per year. 
C) fluctuate between 4.5 and 5.5 percent per year. 
D) decline at a trend rate of 7.5 to 8.5 per year. 
A) remain constant. 
B) rise at a trend rate of 2.25 to 3.5 percent per year. 
C) fluctuate between 4.5 and 5.5 percent per year. 
D) decline at a trend rate of 7.5 to 8.5 per year.

Question 19

According to Okun's rule of thumb, if trend growth is 3 percent, and unemployment decreases from 5 percent to 4 percent, income would be expected to:

Accepted Answer

A) fall by 4 percent. 
B) rise by 5 percent. 
C) fall by 2 percent. 
D) rise by 2 percent. 
A) fall by 4 percent. 
B) rise by 5 percent. 
C) fall by 2 percent. 
D) rise by 2 percent.

Question 20

The target rate of unemployment can be affected by all of the following except the:

Accepted Answer

A) level of output. 
B) population's age structure. 
C) social and institutional structure. 
D) relationship between inflation and unemployment. 
A) level of output. 
B) population's age structure. 
C) social and institutional structure. 
D) relationship between inflation and unemployment.

Exam 33: Jobs and Unemployment

Unemployment caused by a recession is called:

Cyclical unemployment:

What happened to the duration of unemployment during the 2008/09 recession? What is the likely reason?

Structural unemployment is caused by:

Over the past several years, the target rate of unemployment has risen. Which of the following would not be used to explain this?

What would you expect unemployment insurance to do to the target unemployment rate?

What role has globalization played in increasing the target unemployment rate? What other factors have affected the target rate?

Explain why truly entrepreneurial people can never be unemployed.

Should the unemployment rate be considered a normative or positive concept?

What would you expect to happen to potential output as reservation wages fall? Why?

The jobs program suggested by the author was put forward in order to:

According to Okun's rule of thumb, if trend growth is 3 percent and the economy is producing at an annual rate of $7 trillion, if the rate of unemployment rises from 6 percent to 8 percent, income would be expected to:

With respect to the unemployment problem, social responsibility framework economists generally take the position that:

If a politician adheres to the individual responsibility framework, which of the following would not be mentioned in their campaign manifesto?

It can be argued that the minimum jobs proposal is preferable to a minimum wage law because:

According to Okun's rule of thumb, if trend growth is 2 percent and the economy is producing at an annual rate of $5 trillion, a decrease in the rate of unemployment from 7 percent to 6 percent would be expected to be associated with which of the following changes in income?

Someone who believes in the individual responsibility framework believes that the standard measure of unemployment underestimates the level of unemployment.

In the United States, potential output in the long run tends to:

According to Okun's rule of thumb, if trend growth is 3 percent, and unemployment decreases from 5 percent to 4 percent, income would be expected to:

The target rate of unemployment can be affected by all of the following except the:

Economics and Economic Reasoning

The Production Possibility Model, Trade, and Globalization

Economic Institutions

Supply and Demand

Using Supply and Demand

Describing Supply and Demand: Elasticities

Taxation and Government Intervention

Market Failure Versus Government Failure

Comparative Advantage, Exchange Rates, and Globalization

International Trade Policy

Production and Cost Analysis I

Production and Cost Analysis II

Perfect Competition

Monopoly and Monopolistic Competition

Oligopoly and Antitrust Policy

Real-World Competition and Technology

Work and the Labor Market

Who Gets What the Distribution of Income

The Logic of Individual Choice: the Foundation of Supply and Demand

Game Theory, Strategic Decision Making, and Behavioral Economics

Thinking Like a Modern Economist

Behavioral Economics and Modern Economic Policy

Microeconomic Policy, Economic Reasoning, and Beyond

Economic Growth, Business Cycles, and Unemployment

Measuring and Describing the Aggregate Economy

The Keynesian Short-Run Policy Model: Demand-Side Policies

The Classical Long-Run Policy Model: Growth and Supply-Side Policies

The Financial Sector and the Economy

Monetary Policy

Financial Crises, Panics, and Unconventional Monetary Policy

Deficits and Debt: the Austerity Debate

The Fiscal Policy Dilemma

Inflation, Deflation, and Macro Policy

International Financial Policy

Macro Policy in a Global Setting

Structural Stagnation and Globalization

Macro Policy in Developing Countries

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