Question 1

Unemployment correlated with the ups and downs of the business cycle is called:

Accepted Answer

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

Question 2

What is the term for workers who have given up looking for a job but would still like one?

Accepted Answer

A)  jobless workers 
B)  discouraged workers 
C)  laid off workers 
D)  discarded workers 
A)  jobless workers 
B)  discouraged workers 
C)  laid off workers 
D)  discarded workers

Question 3

Which of the following does NOT explain persistently higher unemployment in Europe than in the United States?

Accepted Answer

A)  labor unions 
B)  minimum wages 
C)  the extent of globalization 
D)  employment protection laws 
A)  labor unions 
B)  minimum wages 
C)  the extent of globalization 
D)  employment protection laws

Question 4

The natural unemployment rate is the sum of the structural and frictional unemployment rates.

Accepted Answer

A) True 
 B)False

Question 5

Frictional unemployment is caused by:

Accepted Answer

A)  creative destruction. 
B)  recessions. 
C)  the transformation of the United States into a service economy. 
D)  the changing seasons of the year. 
A)  creative destruction. 
B)  recessions. 
C)  the transformation of the United States into a service economy. 
D)  the changing seasons of the year.

Question 6

Discouraged workers are people who:

Accepted Answer

A)  have given up looking for work but would still like to work. 
B)  are willing and able to work but cannot find a job. 
C)  are looking for a job that pays more than they are currently earning. 
D)  are working for fewer hours than they want to. 
A)  have given up looking for work but would still like to work. 
B)  are willing and able to work but cannot find a job. 
C)  are looking for a job that pays more than they are currently earning. 
D)  are working for fewer hours than they want to.

Question 7

Why would the unemployment rate likely understate the overall decline in an economy's performance,especially in a recession?

Accepted Answer

The unemployment rate fails to take at l

Question 8

If the median wage is $9 in country X and $8 in country Y and both countries have similar elasticities of labor supply and demand,then a minimum wage of $4 in both countries will tend to:

Accepted Answer

A)  make unemployment higher in country X than in country Y. 
B)  make unemployment higher in country Y than in country X. 
C)  make unemployment the same in both countries. 
D)  have no effect in either country. 
A)  make unemployment higher in country X than in country Y. 
B)  make unemployment higher in country Y than in country X. 
C)  make unemployment the same in both countries. 
D)  have no effect in either country.

Question 9

What problem do employment protection laws create?

Accepted Answer

A)  They encourage workers to change jobs more frequently. 
B)  They are costly for governments to maintain. 
C)  Employers have difficulty keeping qualified workers. 
D)  Employers are reluctant to hire new workers. 
A)  They encourage workers to change jobs more frequently. 
B)  They are costly for governments to maintain. 
C)  Employers have difficulty keeping qualified workers. 
D)  Employers are reluctant to hire new workers.

Question 10

Which of the following does NOT contribute directly to the persistence of structural unemployment?

Accepted Answer

A)  unemployment benefits 
B)  unions 
C)  employment protection laws 
D)  work tests 
A)  unemployment benefits 
B)  unions 
C)  employment protection laws 
D)  work tests

Question 11

Rigidity of employment index summarizes the difficulty of training new workers in a specific industry.

Accepted Answer

A) True 
 B)False

Question 12

The causes of frictional unemployment include:

Accepted Answer

A)  the business cycle. 
B)  the scarcity of information. 
C)  changes of economic structure. 
D)  labor unions. 
A)  the business cycle. 
B)  the scarcity of information. 
C)  changes of economic structure. 
D)  labor unions.

Question 13

Structural unemployment is more persistent in France than in the United States because:

Accepted Answer

A)  French workers have less incentive to quickly seek a new position since their unemployment benefits are much higher. 
B)  France's labor regulations require a mandatory waiting period before a worker can reapply for a new job. 
C)  American workers have many more job opportunities than French workers. 
D)  labor unions are weaker in France than they are in the United States. 
A)  French workers have less incentive to quickly seek a new position since their unemployment benefits are much higher. 
B)  France's labor regulations require a mandatory waiting period before a worker can reapply for a new job. 
C)  American workers have many more job opportunities than French workers. 
D)  labor unions are weaker in France than they are in the United States.

Question 14

Which of the following is a case of frictional unemployment?

Accepted Answer

A)  Timothy is looking for a job where he can apply his expertise in computer programming. 
B)  Terrance is one of more than a dozen applicants for a position teaching high school math. 
C)  Tina was laid off temporarily while her company downsized. 
D)  Thomas recently quit his job to start his own business. 
A)  Timothy is looking for a job where he can apply his expertise in computer programming. 
B)  Terrance is one of more than a dozen applicants for a position teaching high school math. 
C)  Tina was laid off temporarily while her company downsized. 
D)  Thomas recently quit his job to start his own business.

Question 15

If the equilibrium wage is $9 in the market for hotel workers and $8 in the market for restaurant workers and both markets have similar elasticities of labor supply and demand,then a minimum wage of $4 in both markets will:

Accepted Answer

A)  cause more unemployment among hotel workers than restaurant workers. 
B)  cause more unemployment among restaurant workers than restaurant workers. 
C)  cause the same amount of unemployment in both markets. 
D)  have no effect in either market. 
A)  cause more unemployment among hotel workers than restaurant workers. 
B)  cause more unemployment among restaurant workers than restaurant workers. 
C)  cause the same amount of unemployment in both markets. 
D)  have no effect in either market.

Question 16

Explain the impact of discouraged workers on the official unemployment rate.

Accepted Answer

A discouraged worker is someone who has

Question 17

Higher levels of unemployment benefits and employment protection:

Accepted Answer

A)  raise structural unemployment. 
B)  lower structural unemployment. 
C)  raise cyclical unemployment. 
D)  lower cyclical unemployment. 
A)  raise structural unemployment. 
B)  lower structural unemployment. 
C)  raise cyclical unemployment. 
D)  lower cyclical unemployment.

Question 18

Several years ago,the rising popularity of Barnes & Noble and Borders shifted workers from independent bookshops to larger chains.What type of unemployment was associated with this reallocation of the work force?

Accepted Answer

A)  frictional unemployment 
B)  technological substitution 
C)  creative destruction 
D)  structural unemployment 
A)  frictional unemployment 
B)  technological substitution 
C)  creative destruction 
D)  structural unemployment

Question 19

Cyclical unemployment is:

Accepted Answer

A)  short-term unemployment caused by the ordinary difficulties of matching employee to employer. 
B)  persistent,long-term unemployment caused by long-lasting shocks or permanent features of an economy that make it more difficult for some workers to find jobs. 
C)  unemployment correlated with the business cycle. 
D)  natural unemployment. 
A)  short-term unemployment caused by the ordinary difficulties of matching employee to employer. 
B)  persistent,long-term unemployment caused by long-lasting shocks or permanent features of an economy that make it more difficult for some workers to find jobs. 
C)  unemployment correlated with the business cycle. 
D)  natural unemployment.

Question 20

If every date required marriage,there would be many more dates than there are now.

Accepted Answer

A) True 
 B)False

Exam 11: Unemployment and Labor Force Participation

Unemployment correlated with the ups and downs of the business cycle is called:

What is the term for workers who have given up looking for a job but would still like one?

Which of the following does NOT explain persistently higher unemployment in Europe than in the United States?

The natural unemployment rate is the sum of the structural and frictional unemployment rates.

Frictional unemployment is caused by:

Discouraged workers are people who:

Why would the unemployment rate likely understate the overall decline in an economy's performance,especially in a recession?

If the median wage is $9 in country X and $8 in country Y and both countries have similar elasticities of labor supply and demand,then a minimum wage of $4 in both countries will tend to:

What problem do employment protection laws create?

Which of the following does NOT contribute directly to the persistence of structural unemployment?

Rigidity of employment index summarizes the difficulty of training new workers in a specific industry.

The causes of frictional unemployment include:

Structural unemployment is more persistent in France than in the United States because:

Which of the following is a case of frictional unemployment?

If the equilibrium wage is $9 in the market for hotel workers and $8 in the market for restaurant workers and both markets have similar elasticities of labor supply and demand,then a minimum wage of $4 in both markets will:

Explain the impact of discouraged workers on the official unemployment rate.

Higher levels of unemployment benefits and employment protection:

Several years ago,the rising popularity of Barnes & Noble and Borders shifted workers from independent bookshops to larger chains.What type of unemployment was associated with this reallocation of the work force?

Cyclical unemployment is:

If every date required marriage,there would be many more dates than there are now.

The Big Ideas

The Power of Trade

Supply and Demand

Equilibrium- How Supply and Demand

Price Ceilings and Floors

GDP and the Measurement of Progress

The Wealth of Nations and Economic Growth

Growth,capital Accumulation

Saving,investment,and the Financial System

Stock Markets and Personal Finance

Inflation and the Quantity Theory of Money

Business Fluctuations

Transmission and Amplification Mechanisms

The Federal Reserve System

Monetary Policy

The Federal Budget- Taxes and Spending

Fiscal Policy

International Trade

International Finance

Political Economy and Public Choice

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