Question 1

If the natural rate of unemployment is 4.7 percent and the actual rate of unemployment is 5.5 percent, then by definition there is

Accepted Answer

A) cyclical unemployment amounting to 0.8 percent of the labor force. 
B) frictional unemployment amounting to 0.8 percent of the labor force. 
C) structural unemployment amounting to 0.8 percent of the labor force. 
D) search unemployment amounting to 0.8 percent of the labor force. 
A) cyclical unemployment amounting to 0.8 percent of the labor force. 
B) frictional unemployment amounting to 0.8 percent of the labor force. 
C) structural unemployment amounting to 0.8 percent of the labor force. 
D) search unemployment amounting to 0.8 percent of the labor force.

Question 2

In 1914, Henry Ford began paying his workers $5 per day, about twice the going wage. As a result, turnover and absenteeism fell and productivity and profits rose.

Accepted Answer

A) True 
 B)False

Question 3

Public policy, without intending to do so, can increase frictional unemployment.

Accepted Answer

A) True 
 B)False

Question 4

When a country keeps its workers as fully employed as possible, it achieves a higher level of GDP than if many of its workers were idle.

Accepted Answer

A) True 
 B)False

Question 5

Violett quit her job because she was unhappy at work. Alexandra was laid off from her landscaping job because her company was downsizing. Who is eligible for unemployment insurance benefits?

Accepted Answer

A) Both Violett and Alexandra 
B) Violett but not Alexandra 
C) Alexandra but not Violett 
D) Neither Violett nor Alexandra 
A) Both Violett and Alexandra 
B) Violett but not Alexandra 
C) Alexandra but not Violett 
D) Neither Violett nor Alexandra

Question 6

The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor market from a regular survey of about 600 households, called the Current Population Survey.

Accepted Answer

A) True 
 B)False

Question 7

The Bureau of Labor Statistics produces data on unemployment, types of employment, length of the average workweek, and the duration of unemployment.

Accepted Answer

A) True 
 B)False

Question 8

The demand for labor by a certain firm is independent of the demand for that firm's product.

Accepted Answer

A) True 
 B)False

Question 9

Data on the unemployment rate in the U.S. since 1960 show that the unemployment rate sometimes is close to zero.

Accepted Answer

A) True 
 B)False

Question 10

The natural rate of unemployment

Accepted Answer

A) varies less than the measured unemployment rate. 
B) varies little over time and across countries. 
C) is closely associated with the ups and downs in economic activity. 
D) is set by the Federal Reserve. 
A) varies less than the measured unemployment rate. 
B) varies little over time and across countries. 
C) is closely associated with the ups and downs in economic activity. 
D) is set by the Federal Reserve.

Question 11

Table 28-3
​
​
 $$\begin{array} { | l | l | } 
\hline \text { Civilian labor force } & 100 \text { million } \
\hline \text { Persons unemployed } 15 \text { weeks or longer } & 1.6 \text { million } \
\hline \text { Job losers and persons who have completed temporary jobs (excludes job leavers) } & 3.1 \text { million } \
\hline \text { Total unemployed } & 6.2 \text { million } \
\hline \text { Total unemployed plus discouraged workers } & 7.0 \text { million } \
\hline \text { Total unemployed plus all marginally attached workers } & 8.1 \text { million } \
\hline \text { Total unemployed plus all marginally attached workers plus total employed part-time } & 9.2 \text { million } \
\text { for economic reasons } & \
\hline
\end{array}$$
-Refer to Table 28-3. What is the U-4 measure of labor underutilization?

Accepted Answer

A) 6.5% 
B) 6.9% 
C) 7.0% 
D) 17.9% 
A) 6.5% 
B) 6.9% 
C) 7.0% 
D) 17.9%

Question 12

Minimum wage laws, labor unions, and efficiency wages all generate unemployment by what common mechanism?

Accepted Answer

Wages bein

Question 13

Critics of unions argue that unions cause the allocation of labor to be inefficient and inequitable.

Accepted Answer

A) True 
 B)False

Question 14

Briefly summarize the advantages and disadvantages of unemployment insurance.

Accepted Answer

The main advantage is that unemployment

Question 15

Public policy can reduce the economy's natural rate of unemployment.

Accepted Answer

A) True 
 B)False

Question 16

Public policy

Accepted Answer

A) can reduce both frictional unemployment and the natural rate of unemployment. 
B) can reduce frictional unemployment, but it cannot reduce the natural rate of unemployment. 
C) cannot reduce frictional unemployment, but it can reduce the natural rate of unemployment. 
D) cannot reduce either frictional unemployment or the natural rate of unemployment. 
A) can reduce both frictional unemployment and the natural rate of unemployment. 
B) can reduce frictional unemployment, but it cannot reduce the natural rate of unemployment. 
C) cannot reduce frictional unemployment, but it can reduce the natural rate of unemployment. 
D) cannot reduce either frictional unemployment or the natural rate of unemployment.

Question 17

Define the natural rate of unemployment and cyclical unemployment.

Accepted Answer

The natural rate of unemployment refers

Question 18

Evidence from research studies by economists

Accepted Answer

A) shows that increased unemployment benefits decrease the job search efforts of the unemployed. 
B) shows that increased unemployment benefits have virtually no effect on the job search efforts of the unemployed. 
C) shows that increased unemployment benefits increase the job search efforts of the unemployed. 
D) is unclear regarding what increased unemployment benefits do to the job search efforts of the unemployed. 
A) shows that increased unemployment benefits decrease the job search efforts of the unemployed. 
B) shows that increased unemployment benefits have virtually no effect on the job search efforts of the unemployed. 
C) shows that increased unemployment benefits increase the job search efforts of the unemployed. 
D) is unclear regarding what increased unemployment benefits do to the job search efforts of the unemployed.

Question 19

Only paid workers are included in the Bureau of Labor Statistics' "employed" category.

Accepted Answer

A) True 
 B)False

Question 20

The unemployment rate reported by the Bureau of Labor Statistics clearly understates the true unemployment rate.

Accepted Answer

A) True 
 B)False

Exam 28: Unemployment and Its Natural Rate

If the natural rate of unemployment is 4.7 percent and the actual rate of unemployment is 5.5 percent, then by definition there is

In 1914, Henry Ford began paying his workers $5 per day, about twice the going wage. As a result, turnover and absenteeism fell and productivity and profits rose.

Public policy, without intending to do so, can increase frictional unemployment.

When a country keeps its workers as fully employed as possible, it achieves a higher level of GDP than if many of its workers were idle.

Violett quit her job because she was unhappy at work. Alexandra was laid off from her landscaping job because her company was downsizing. Who is eligible for unemployment insurance benefits?

The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor market from a regular survey of about 600 households, called the Current Population Survey.

The Bureau of Labor Statistics produces data on unemployment, types of employment, length of the average workweek, and the duration of unemployment.

The demand for labor by a certain firm is independent of the demand for that firm's product.

Data on the unemployment rate in the U.S. since 1960 show that the unemployment rate sometimes is close to zero.

The natural rate of unemployment

Minimum wage laws, labor unions, and efficiency wages all generate unemployment by what common mechanism?

Critics of unions argue that unions cause the allocation of labor to be inefficient and inequitable.

Briefly summarize the advantages and disadvantages of unemployment insurance.

Public policy can reduce the economy's natural rate of unemployment.

Public policy

Define the natural rate of unemployment and cyclical unemployment.

Evidence from research studies by economists

Only paid workers are included in the Bureau of Labor Statistics' "employed" category.

The unemployment rate reported by the Bureau of Labor Statistics clearly understates the true unemployment rate.

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Elasticity and Its Application

Supply, Demand, and Government Policies

Consumers, Producers, and the Efficiency of Markets

Applications: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers in Microeconomics

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

Tools of Finance

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short-Run Tradeoff Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

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