Question 1

The natural rate of unemployment is the

Accepted Answer

A)  unemployment rate that would prevail with zero inflation. 
B)  rate associated with the highest possible level of GDP. 
C)  difference between the long-run and short-run unemployment rates. 
D)  amount of unemployment that the economy normally experiences. 
A)  unemployment rate that would prevail with zero inflation. 
B)  rate associated with the highest possible level of GDP. 
C)  difference between the long-run and short-run unemployment rates. 
D)  amount of unemployment that the economy normally experiences.

Question 2

The labor force equals the

Accepted Answer

A)  number of people employed. 
B)  number of people employed plus the number of people unemployed. 
C)  number of people employed plus the number of people unemployed plus teenagers between ages 14 and 16 who work at least 10 hours a week. 
D)  adult population. 
A)  number of people employed. 
B)  number of people employed plus the number of people unemployed. 
C)  number of people employed plus the number of people unemployed plus teenagers between ages 14 and 16 who work at least 10 hours a week. 
D)  adult population.

Question 3

The Bureau of Labor Statistics reported in 2005 that there were 50.40 million people over age 25 whose highest level of education was some college or an associate degree, 33.86 million of whom were employed and 1.27 million of whom were unemployed. What were the labor-force participation rate and the unemployment rate for this group?

Accepted Answer

A)  69.7% and 2.5% 
B)  69.7% and 3.6% 
C)  67.2% and 2.5% 
D)  67.2% and 3.6% 
A)  69.7% and 2.5% 
B)  69.7% and 3.6% 
C)  67.2% and 2.5% 
D)  67.2% and 3.6%

Question 4

Long-run unemployment arises from a single problem that has a single solution.

Accepted Answer

A) True 
 B)False

Question 5

If unions were formed in more industries, the supply of labor in other industries would

Accepted Answer

A)  increase, causing employment in other industries to rise. 
B)  increase, causing employment in other industries to fall. 
C)  decrease, causing employment in other industries to rise. 
D)  decrease, causing employment in other industries to fall. 
A)  increase, causing employment in other industries to rise. 
B)  increase, causing employment in other industries to fall. 
C)  decrease, causing employment in other industries to rise. 
D)  decrease, causing employment in other industries to fall.

Question 6

Which of the following is correct?

Accepted Answer

A)  Unemployment insurance raises structural unemployment because it reduces the job search efforts of the unemployed. 
B)  Most economists are skeptical of the value of unemployment insurance primarily because they believe that it results in a poorer match between workers and jobs. 
C)  Studies show that when the unemployed become ineligible for benefits, the probability of their finding a job rises markedly. 
D)  All of the above are correct. 
A)  Unemployment insurance raises structural unemployment because it reduces the job search efforts of the unemployed. 
B)  Most economists are skeptical of the value of unemployment insurance primarily because they believe that it results in a poorer match between workers and jobs. 
C)  Studies show that when the unemployed become ineligible for benefits, the probability of their finding a job rises markedly. 
D)  All of the above are correct.

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

Efficiency wages create a

Accepted Answer

A)  shortage of labor and so reduce unemployment. 
B)  shortage of labor and so raise unemployment. 
C)  surplus of labor and so reduce unemployment. 
D)  surplus of labor and so raise unemployment. 
A)  shortage of labor and so reduce unemployment. 
B)  shortage of labor and so raise unemployment. 
C)  surplus of labor and so reduce unemployment. 
D)  surplus of labor and so raise unemployment.

Question 9

An American worker who becomes unemployed typically receives 100% of her former salary during the first six months she is unemployed.

Accepted Answer

A) True 
 B)False

Question 10

Define efficiency wages.

Accepted Answer

Efficiency wages are

Question 11

An economy's natural rate of unemployment refers to the amount of unemployment that the economy normally experiences.

Accepted Answer

A) True 
 B)False

Question 12

Frictional unemployment is thought to explain relatively

Accepted Answer

A)  short spells of unemployment, as is structural unemployment. 
B)  long spells of unemployment, as is structural unemployment. 
C)  short spells of unemployment, while structural unemployment is thought to explain relatively long spells of unemployment. 
D)  long spells of unemployment, while structural unemployment is thought to explain relatively short spells of unemployment. 
A)  short spells of unemployment, as is structural unemployment. 
B)  long spells of unemployment, as is structural unemployment. 
C)  short spells of unemployment, while structural unemployment is thought to explain relatively long spells of unemployment. 
D)  long spells of unemployment, while structural unemployment is thought to explain relatively short spells of unemployment.

Question 13

The natural rate of unemployment is impervious to economic policy.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is not a cause of the decline in the U.S. men's labor­force participation rate over the past several decades?

Accepted Answer

A)  young men now stay in school longer than their fathers and grandfathers did 
B)  older men now retire earlier and live longer 
C)  with more women employed, there are fewer jobs now available to men 
D)  more fathers now stay at home to raise their children 
A)  young men now stay in school longer than their fathers and grandfathers did 
B)  older men now retire earlier and live longer 
C)  with more women employed, there are fewer jobs now available to men 
D)  more fathers now stay at home to raise their children

Question 15

Figure 28-3  
-Refer to Figure 28-3. If the government imposes a minimum wage of $4, then employment will decrease by

Accepted Answer

A)  0 workers. 
B)  2,000 workers. 
C)  3,000 workers. 
D)  4,000 workers. 
A)  0 workers. 
B)  2,000 workers. 
C)  3,000 workers. 
D)  4,000 workers.

Question 16

Evidence indicates that the typical person who becomes unemployed will

Accepted Answer

A)  soon find a job. 
B)  find a job but not before a year or more has gone by. 
C)  leave the labor force and never return. 
D)  retire soon after 
A)  soon find a job. 
B)  find a job but not before a year or more has gone by. 
C)  leave the labor force and never return. 
D)  retire soon after

Question 17

Jai Li just lost her job, and she has not yet started looking for a new one. The Bureau of Labor Statistics counts Jai Li as

Accepted Answer

A)  unemployed and in the labor force. 
B)  unemployed but not in the labor force. 
C)  in the labor force but not unemployed. 
D)  neither in the labor force nor unemployed. 
A)  unemployed and in the labor force. 
B)  unemployed but not in the labor force. 
C)  in the labor force but not unemployed. 
D)  neither in the labor force nor unemployed.

Question 18

Minimum wage laws help explain the natural rate of unemployment if they create a surplus in any labor market.

Accepted Answer

A) True 
 B)False

Question 19

The Bureau of Labor Statistics' U­1 measure of joblessness is larger than its U­6 measure of joblessness.

Accepted Answer

A) True 
 B)False

Question 20

Three employers have justified their actions as follows. Whose logic is not consistent with the logic of efficiency wage theory?

Accepted Answer

A)  Instead of spending money on an electronic timing system that monitors worker hours, Tom spends an equivalent amount of money on higher wages. 
B)  Dick pays his workers less than the equilibrium wage so that they will not have the time or money to look for work somewhere else. 
C)  Harry pays his workers in a developing country more than the going wage hoping that they will get a better diet and so be more productive. 
D)  None of the above is consistent with the logic of efficiency wage theory. 
A)  Instead of spending money on an electronic timing system that monitors worker hours, Tom spends an equivalent amount of money on higher wages. 
B)  Dick pays his workers less than the equilibrium wage so that they will not have the time or money to look for work somewhere else. 
C)  Harry pays his workers in a developing country more than the going wage hoping that they will get a better diet and so be more productive. 
D)  None of the above is consistent with the logic of efficiency wage theory.

The natural rate of unemployment is the

The labor force equals the

Long-run unemployment arises from a single problem that has a single solution.

If unions were formed in more industries, the supply of labor in other industries would

Which of the following is correct?

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

Efficiency wages create a

An American worker who becomes unemployed typically receives 100% of her former salary during the first six months she is unemployed.

Define efficiency wages.

An economy's natural rate of unemployment refers to the amount of unemployment that the economy normally experiences.

Frictional unemployment is thought to explain relatively

The natural rate of unemployment is impervious to economic policy.

Which of the following is not a cause of the decline in the U.S. men's laborforce participation rate over the past several decades?

Figure 28-3 -Refer to Figure 28-3. If the government imposes a minimum wage of $4, then employment will decrease by

Evidence indicates that the typical person who becomes unemployed will

Jai Li just lost her job, and she has not yet started looking for a new one. The Bureau of Labor Statistics counts Jai Li as

Minimum wage laws help explain the natural rate of unemployment if they create a surplus in any labor market.

The Bureau of Labor Statistics' U1 measure of joblessness is larger than its U6 measure of joblessness.

Three employers have justified their actions as follows. Whose logic is not consistent with the logic of efficiency wage theory?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic 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

Filters

Exam 10: Unemployment and Its Natural Rate

The natural rate of unemployment is the

The labor force equals the

Long-run unemployment arises from a single problem that has a single solution.

If unions were formed in more industries, the supply of labor in other industries would

Which of the following is correct?

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

Efficiency wages create a

An American worker who becomes unemployed typically receives 100% of her former salary during the first six months she is unemployed.

Define efficiency wages.

An economy's natural rate of unemployment refers to the amount of unemployment that the economy normally experiences.

Frictional unemployment is thought to explain relatively

The natural rate of unemployment is impervious to economic policy.

Which of the following is not a cause of the decline in the U.S. men's labor­force participation rate over the past several decades?

Figure 28-3 -Refer to Figure 28-3. If the government imposes a minimum wage of $4, then employment will decrease by

Evidence indicates that the typical person who becomes unemployed will

Jai Li just lost her job, and she has not yet started looking for a new one. The Bureau of Labor Statistics counts Jai Li as

Minimum wage laws help explain the natural rate of unemployment if they create a surplus in any labor market.

The Bureau of Labor Statistics' U­1 measure of joblessness is larger than its U­6 measure of joblessness.

Three employers have justified their actions as follows. Whose logic is not consistent with the logic of efficiency wage theory?

Ten Principles of Economics

Thinking Like an Economist

Interdependence and the Gains From Trade

The Market Forces of Supply and Demand

Measuring a Nations Income

Measuring the Cost of Living

Production and Growth

Saving, Investment, and the Financial System

The Basic 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

Filters

Which of the following is not a cause of the decline in the U.S. men's laborforce participation rate over the past several decades?

The Bureau of Labor Statistics' U1 measure of joblessness is larger than its U6 measure of joblessness.