Question 1

What allows an employee to quit at any time and an employer to fire at any time for any reason?

Accepted Answer

A)  employment-at-will 
B)  contractual autonomy 
C)  right-to-hire 
D)  termination sovereignty 
A)  employment-at-will 
B)  contractual autonomy 
C)  right-to-hire 
D)  termination sovereignty

Question 2

When the baby boomers began to retire in 2008,the labor force participation rate increased.

Accepted Answer

A) True 
 B)False

Question 3

The natural unemployment rate tends to move inversely with real GDP growth in an economy.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following programs could help overcome structural unemployment?

Accepted Answer

A)  worker retraining 
B)  limitations to unemployment benefits 
C)  job-search assistance programs 
D)  worker retraining,limiting unemployment benefits,and job-search assistance 
A)  worker retraining 
B)  limitations to unemployment benefits 
C)  job-search assistance programs 
D)  worker retraining,limiting unemployment benefits,and job-search assistance

Question 5

Minimum wage laws and unions tend to:

Accepted Answer

A)  lower wages and raise unemployment. 
B)  raise wages and raise unemployment. 
C)  lower wages and lower unemployment. 
D)  raise wages and lower unemployment. 
A)  lower wages and raise unemployment. 
B)  raise wages and raise unemployment. 
C)  lower wages and lower unemployment. 
D)  raise wages and lower unemployment.

Question 6

Why did 36,000 travel agents lose their jobs between 1999 and 2006?

Accepted Answer

A)  There was a large decline in tourism in those years. 
B)  More people started making their travel arrangements online. 
C)  They spent too much time taking vacations of their own and got fired. 
D)  They became professional athletes. 
A)  There was a large decline in tourism in those years. 
B)  More people started making their travel arrangements online. 
C)  They spent too much time taking vacations of their own and got fired. 
D)  They became professional athletes.

Question 7

Comparing current real GDP growth to _____ will give a good indication of the change in the unemployment rate.

Accepted Answer

A)  nominal GDP growth 
B)  average real GDP growth 
C)  real growth rates for the past 2 years 
D)  per capita real GDP growth 
A)  nominal GDP growth 
B)  average real GDP growth 
C)  real growth rates for the past 2 years 
D)  per capita real GDP growth

Question 8

Most economists argue against increases in the minimum wage as a way to help the poor.Explain why most economists do not favor increases in the minimum wage to raise the living standards of low-income households.

Accepted Answer

Increases in the minimum wage raise the

Question 9

Structural unemployment is a bigger problem in Europe than in the United States because of:

Accepted Answer

A)  technological differences. 
B)  labor market regulations. 
C)  oil prices. 
D)  drug use. 
A)  technological differences. 
B)  labor market regulations. 
C)  oil prices. 
D)  drug use.

Question 10

The widespread use of contraceptive pills is one of the major reasons for the increased female labor force participation rate after World War II.

Accepted Answer

A) True 
 B)False

Question 11

In the United States,the underemployment rate is typically higher than the unemployment rate.

Accepted Answer

A) True 
 B)False

Question 12

The labor force consists of the number of employed plus the number of unemployed workers.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following is an example of an unemployed person?

Accepted Answer

A)  a retiree working as a volunteer in a hospital 
B)  a worker who is willing to work more hours if available 
C)  a recent college graduate looking for her first job 
D)  a full-time student working part time at night 
A)  a retiree working as a volunteer in a hospital 
B)  a worker who is willing to work more hours if available 
C)  a recent college graduate looking for her first job 
D)  a full-time student working part time at night

Question 14

An increase in the number of underemployed workers leads to an increase in the unemployment rate.

Accepted Answer

A) True 
 B)False

Question 15

(Figure: Labor Supply and Demand)Refer to the figure.How much will the quantity of labor employed decline as a result of the labor union's action to increase its wage demands to $11 an hour?

Accepted Answer

A)  700 
B)  1,100 
C)  1,800 
D)  2,700 
A)  700 
B)  1,100 
C)  1,800 
D)  2,700

Question 16

Structural unemployment is a more serious problem in Western Europe than in the United States,primarily because of more generous unemployment benefits,stronger union presence,and employment protection laws in Western Europe.

Accepted Answer

A) True 
 B)False

Question 17

The natural unemployment rate is defined as frictional unemployment plus cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 18

What would you expect to happen to the unemployment rate during a recession? How about the natural rate of unemployment?

Accepted Answer

The unemployment rate will increase duri

Question 19

Which of the following statements about the employment-at-will doctrine is TRUE?

Accepted Answer

A)  The doctrine helps raise labor hiring and firing costs,leading to lower unemployment rates. 
B)  The doctrine helps raise labor hiring and firing costs,leading to higher unemployment rates. 
C)  The doctrine helps lower labor hiring and firing costs,leading to lower unemployment rates. 
D)  The doctrine helps lower labor hiring and firing costs,leading to higher unemployment rates. 
A)  The doctrine helps raise labor hiring and firing costs,leading to lower unemployment rates. 
B)  The doctrine helps raise labor hiring and firing costs,leading to higher unemployment rates. 
C)  The doctrine helps lower labor hiring and firing costs,leading to lower unemployment rates. 
D)  The doctrine helps lower labor hiring and firing costs,leading to higher unemployment rates.

Question 20

The Keynesian explanation for cyclical unemployment is:

Accepted Answer

A)  that labor is reallocated across different industries. 
B)  the same as that for frictional and structural unemployment. 
C)  that wage demands are too high relative to falling prices. 
D)  that it is a normal response to real shocks in the economy. 
A)  that labor is reallocated across different industries. 
B)  the same as that for frictional and structural unemployment. 
C)  that wage demands are too high relative to falling prices. 
D)  that it is a normal response to real shocks in the economy.

Exam 11: Unemployment and Labor Force Participation

What allows an employee to quit at any time and an employer to fire at any time for any reason?

When the baby boomers began to retire in 2008,the labor force participation rate increased.

The natural unemployment rate tends to move inversely with real GDP growth in an economy.

Which of the following programs could help overcome structural unemployment?

Minimum wage laws and unions tend to:

Why did 36,000 travel agents lose their jobs between 1999 and 2006?

Comparing current real GDP growth to _____ will give a good indication of the change in the unemployment rate.

Most economists argue against increases in the minimum wage as a way to help the poor.Explain why most economists do not favor increases in the minimum wage to raise the living standards of low-income households.

Structural unemployment is a bigger problem in Europe than in the United States because of:

The widespread use of contraceptive pills is one of the major reasons for the increased female labor force participation rate after World War II.

In the United States,the underemployment rate is typically higher than the unemployment rate.

The labor force consists of the number of employed plus the number of unemployed workers.

Which of the following is an example of an unemployed person?

An increase in the number of underemployed workers leads to an increase in the unemployment rate.

(Figure: Labor Supply and Demand)Refer to the figure.How much will the quantity of labor employed decline as a result of the labor union's action to increase its wage demands to $11 an hour?

Structural unemployment is a more serious problem in Western Europe than in the United States,primarily because of more generous unemployment benefits,stronger union presence,and employment protection laws in Western Europe.

The natural unemployment rate is defined as frictional unemployment plus cyclical unemployment.

What would you expect to happen to the unemployment rate during a recession? How about the natural rate of unemployment?

Which of the following statements about the employment-at-will doctrine is TRUE?

The Keynesian explanation for cyclical unemployment is:

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

Filters