Question 1

Frictional unemployment is inevitable because

Accepted Answer

A)  sectoral shifts are always happening. 
B)  there is a federal minimum-wage law in the U.S. 
C)  some people do not want to be employed. 
D)  unions are very popular in the U.S. 
A)  sectoral shifts are always happening. 
B)  there is a federal minimum-wage law in the U.S. 
C)  some people do not want to be employed. 
D)  unions are very popular in the U.S.

Question 2

When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the quantity of labor supplied is lower and the quantity of labor demand is higher than at the equilibrium wage.

Accepted Answer

A) True 
 B)False

Question 3

Some people who are employed or who are not making serious effort to find employment will report themselves as unemployed. Some people who want to find work will be counted as out of the labor force.

Accepted Answer

A)  Both the first and the second fact tend to make the reported unemployment rate lower than otherwise. 
B)  Both the first and the second fact tend to make the reported unemployment rate higher than otherwise. 
C)  The first fact tends to make the reported unemployment rate higher than otherwise, while the second fact tends to make the reported unemployment rate lower than otherwise. 
D)  The first fact tends to make the reported unemployment rate lower than otherwise, while the second fact tends to make the reported unemployment rate higher than otherwise. 
A)  Both the first and the second fact tend to make the reported unemployment rate lower than otherwise. 
B)  Both the first and the second fact tend to make the reported unemployment rate higher than otherwise. 
C)  The first fact tends to make the reported unemployment rate higher than otherwise, while the second fact tends to make the reported unemployment rate lower than otherwise. 
D)  The first fact tends to make the reported unemployment rate lower than otherwise, while the second fact tends to make the reported unemployment rate higher than otherwise.

Question 4

Minimum-wage laws are least likely to affect the wages paid to

Accepted Answer

A)  teenagers. 
B)  low-skill workers. 
C)  inexperienced workers. 
D)  highly-educated workers. 
A)  teenagers. 
B)  low-skill workers. 
C)  inexperienced workers. 
D)  highly-educated workers.

Question 5

Unemployment insurance

Accepted Answer

A)  may improve the ability of the economy to match workers with appropriate jobs. 
B)  reduces the job search efforts of the unemployed. 
C)  increases the amount of frictional unemployment in the economy. 
D)  All of the above are correct. 
A)  may improve the ability of the economy to match workers with appropriate jobs. 
B)  reduces the job search efforts of the unemployed. 
C)  increases the amount of frictional unemployment in the economy. 
D)  All of the above are correct.

Question 6

Rupert is collecting unemployment insurance benefits. To continue to receive his benefits, he must be looking for work. Because he'd like to continue collecting benefits rather than take a job, he applies at places that are unlikely to hire him. People like Rupert make the reported unemployment rate less than it would otherwise be.

Accepted Answer

A) True 
 B)False

Question 7

Some economists have argued that unemployment insurance improves the ability of the economy to match each worker with the most appropriate job.

Accepted Answer

A) True 
 B)False

Question 8

The Bureau of Labor Statistics classifies people who would like to work but have given up looking for a job as

Accepted Answer

A)  unemployed. If they were classified as out of the labor force, the reported unemployment rate would be larger. 
B)  unemployed. If they were classified as out of the labor force, the reported unemployment rate would be smaller. 
C)  out of the labor force. If they were classified as unemployed, the reported unemployment rate would be larger. 
D)  out of the labor force. If they were classified as unemployed, the reported unemployment rate would be smaller. 
A)  unemployed. If they were classified as out of the labor force, the reported unemployment rate would be larger. 
B)  unemployed. If they were classified as out of the labor force, the reported unemployment rate would be smaller. 
C)  out of the labor force. If they were classified as unemployed, the reported unemployment rate would be larger. 
D)  out of the labor force. If they were classified as unemployed, the reported unemployment rate would be smaller.

Question 9

The amount of unemployment varies

Accepted Answer

A)  little over time and across countries. 
B)  little over time but substantially across countries. 
C)  substantially over time but little across countries. 
D)  substantially over time and across countries. 
A)  little over time and across countries. 
B)  little over time but substantially across countries. 
C)  substantially over time but little across countries. 
D)  substantially over time and across countries.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

How does the government measure the economy's rate of unemployment?

Accepted Answer

The unemployment rat

Question 13

About what percentage of jobs are destroyed every year, and about what percentage of workers leave their jobs in a typical month?

Accepted Answer

A)  1% and 5% 
B)  5% and 1% 
C)  3% and 10% 
D)  10% and 3% 
A)  1% and 5% 
B)  5% and 1% 
C)  3% and 10% 
D)  10% and 3%

Question 14

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 15

Just after World War II, the labor-force participation rate of men was

Accepted Answer

A)  about 33 percent, and in 2012, it was about 50 percent. 
B)  about 50 percent, and in 2012, it was about 60 percent. 
C)  about 60 percent, and in 2012, it was about 60 percent. 
D)  about 90 percent, and in 2012, it was about 70 percent. 
A)  about 33 percent, and in 2012, it was about 50 percent. 
B)  about 50 percent, and in 2012, it was about 60 percent. 
C)  about 60 percent, and in 2012, it was about 60 percent. 
D)  about 90 percent, and in 2012, it was about 70 percent.

Question 16

Most spells of unemployment are long, and most unemployment observed at any given time is long-term.

Accepted Answer

A) True 
 B)False

Question 17

Suppose that bartenders and waiters have no unions. Now suppose that bartenders form a union. What does this do the labor supply and wages of waiters?

Accepted Answer

A)  Both labor supply and wages increase. 
B)  Labor supply increases, and wages decrease. 
C)  Labor supply decreases, and wages increase. 
D)  Both labor supply and wages decrease. 
A)  Both labor supply and wages increase. 
B)  Labor supply increases, and wages decrease. 
C)  Labor supply decreases, and wages increase. 
D)  Both labor supply and wages decrease.

Question 18

Some individuals would like to have a job, but they have given up looking for a job after an unsuccessful search. These individuals are called

Accepted Answer

A)  detached workers, and they are classified by the Bureau of Labor Statistics as unemployed. 
B)  detached workers, and they are not classified by the Bureau of Labor Statistics as unemployed. 
C)  discouraged workers, and they are classified by the Bureau of Labor Statistics as unemployed. 
D)  discouraged workers, and they are not classified by the Bureau of Labor Statistics as unemployed. 
A)  detached workers, and they are classified by the Bureau of Labor Statistics as unemployed. 
B)  detached workers, and they are not classified by the Bureau of Labor Statistics as unemployed. 
C)  discouraged workers, and they are classified by the Bureau of Labor Statistics as unemployed. 
D)  discouraged workers, and they are not classified by the Bureau of Labor Statistics as unemployed.

Question 19

Other things the same, an increase in wages above their equilibrium level

Accepted Answer

A)  increases frictional unemployment but leaves the natural rate of unemployment unchanged. 
B)  increases frictional unemployment and increases the natural rate of unemployment. 
C)  increases structural unemployment but leaves the natural rate of unemployment unchanged. 
D)  increases structural unemployment and increases the natural rate of unemployment. 
A)  increases frictional unemployment but leaves the natural rate of unemployment unchanged. 
B)  increases frictional unemployment and increases the natural rate of unemployment. 
C)  increases structural unemployment but leaves the natural rate of unemployment unchanged. 
D)  increases structural unemployment and increases the natural rate of unemployment.

Question 20

Which of the following is correct?

Accepted Answer

A)  Labor force = number of employed. 
B)  Labor force = population - number of unemployed. 
C)  Unemployment Rate = number of unemployed ÷ number of employed + number of unemployed) × 100. 
D)  Unemployment Rate = number of unemployed ÷ adult population × 100. 
A)  Labor force = number of employed. 
B)  Labor force = population - number of unemployed. 
C)  Unemployment Rate = number of unemployed ÷ number of employed + number of unemployed) × 100. 
D)  Unemployment Rate = number of unemployed ÷ adult population × 100.

Exam 20: Unemployment

Frictional unemployment is inevitable because

When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the quantity of labor supplied is lower and the quantity of labor demand is higher than at the equilibrium wage.

Some people who are employed or who are not making serious effort to find employment will report themselves as unemployed. Some people who want to find work will be counted as out of the labor force.

Minimum-wage laws are least likely to affect the wages paid to

Unemployment insurance

Some economists have argued that unemployment insurance improves the ability of the economy to match each worker with the most appropriate job.

The Bureau of Labor Statistics classifies people who would like to work but have given up looking for a job as

The amount of unemployment varies

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

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

How does the government measure the economy's rate of unemployment?

About what percentage of jobs are destroyed every year, and about what percentage of workers leave their jobs in a typical month?

Frictional unemployment is thought to explain relatively

Just after World War II, the labor-force participation rate of men was

Most spells of unemployment are long, and most unemployment observed at any given time is long-term.

Suppose that bartenders and waiters have no unions. Now suppose that bartenders form a union. What does this do the labor supply and wages of waiters?

Some individuals would like to have a job, but they have given up looking for a job after an unsuccessful search. These individuals are called

Other things the same, an increase in wages above their equilibrium level

Which of the following is correct?

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

Application: The Costs of Taxation

Application: International Trade

Externalities

Public Goods and Common Resources

The Costs of Production

Firms in Competitive Markets

Monopoly

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

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

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