Exam 28: Unemployment and Its Natural Rate

The labor-force participation rate equals the percentage of the labor force that is employed.

Most economists agree that eliminating unemployment insurance would increase the nation's overall level of well-being.

Frictional unemployment is inevitable because the economy is always changing.

Minimum-wage laws are one reason there is always some unemployment in the U.S. economy.

Some degree of unemployment is inevitable in a complex economy.

Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power.

Suppose that some country had an adult population of about 59 million, a labor-force participation rate of 72.9 percent, and an unemployment rate of 2.3 percent. How many people were employed?

Providing training for unemployed individuals is primarily intended to reduce

Critics of government-run employment agencies and public training programs argue that the private market is better at matching workers and jobs than the government is.

Consider two people who are currently out of work. Tim is not looking for work because there have been many job cuts where he lives, and he doesn't think it likely that he will find work. Bev is not currently looking for work, but she would like a job, and she has looked for work in the past. The Bureau of Labor Statistics considers

The Bureau of Labor Statistics' U-5 measure of joblessness includes marginally attached workers.

Within the U.S. population, blacks of prime working age (ages 25-54) have higher rates of unemployment than whites of prime working age (ages 25-54), regardless of gender.

Data on the unemployment rate in the U.S. since 1960 show that the economy always has some unemployment and that the amount changes from year to year.

Measuring unemployment is the job of the Bureau of Labor Statistics.

More than three-fourths of the unemployed are recent entrants into the labor force.

Minimum wages are the predominant reason for unemployment in the U.S. economy.

The adult population must equal the sum of the employed, the unemployed, and those not in the labor force.

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

One explanation for long-run unemployment is that it takes time for workers to search for the jobs that are best suited for them.

Briefly compare the structural unemployment that arises from minimum-wage laws to the frictional unemployment that arises from the process of job search.