Question 1

Public policy

Accepted Answer

A)  can reduce both frictional unemployment and the natural rate of unemployment. 
B)  can reduce frictional unemployment, but it cannot reduce the natural rate of unemployment. 
C)  cannot reduce frictional unemployment, but it can reduce the natural rate of unemployment. 
D)  cannot reduce either frictional unemployment or the natural rate of unemployment. 
A)  can reduce both frictional unemployment and the natural rate of unemployment. 
B)  can reduce frictional unemployment, but it cannot reduce the natural rate of unemployment. 
C)  cannot reduce frictional unemployment, but it can reduce the natural rate of unemployment. 
D)  cannot reduce either frictional unemployment or the natural rate of unemployment.

Question 2

People who report being unemployed but who, in fact, are working for "under the table" pay to avoid taxes on their earnings are really employed and therefore cause the reported unemployment rate to be higher than it would otherwise be.

Accepted Answer

A) True 
 B)False

Question 3

Every month, the Bureau of Labor Statistics surveys 160,000 business establishments to help determine the

Accepted Answer

A)  number of people unemployed. 
B)  number of jobs the economy has gained or lost. 
C)  size of the labor force. 
D)  number of people who own their own businesses. 
A)  number of people unemployed. 
B)  number of jobs the economy has gained or lost. 
C)  size of the labor force. 
D)  number of people who own their own businesses.

Question 4

Employment can rise in one region of the country while it falls in another.

Accepted Answer

A) True 
 B)False

Question 5

Efficiency wages

Accepted Answer

A)  may increase productivity. 
B)  will increase unemployment. 
C)  may improve worker health. 
D)  All of the above are correct. 
A)  may increase productivity. 
B)  will increase unemployment. 
C)  may improve worker health. 
D)  All of the above are correct.

Question 6

The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor market from a regular survey of households called the

Accepted Answer

A)  Census. 
B)  Labor Survey. 
C)  Survey of Economic Indicators. 
D)  Current Population Survey. 
A)  Census. 
B)  Labor Survey. 
C)  Survey of Economic Indicators. 
D)  Current Population Survey.

Question 7

Figure 28-4  
-Refer to Figure 28-4. If 2,000 workers are unemployed, then the minimum wage must be

Accepted Answer

A)  $3. 
B)  $4. 
C)  $5. 
D)  $6. 
A)  $3. 
B)  $4. 
C)  $5. 
D)  $6.

Question 8

Buddy is the owner of a firm that bottles beer in St. Louis, Missouri. There are many other such firms in the area. Buddy decides that if he pays his workers a wage higher than the going market wage, his profits will increase. Which of the following is a likely explanation for his decision?

Accepted Answer

A)  The higher the wage, the less often his workers will choose to leave his firm. 
B)  The higher the wage, the lower will be the costs of obtaining needed supplies. 
C)  The higher the wage, the more he can charge for his beer 
D)  The higher the wage, the more he will have to monitor his workers for shirking. 
A)  The higher the wage, the less often his workers will choose to leave his firm. 
B)  The higher the wage, the lower will be the costs of obtaining needed supplies. 
C)  The higher the wage, the more he can charge for his beer 
D)  The higher the wage, the more he will have to monitor his workers for shirking.

Question 9

Briefly describe how labor unions can affect wages in non-unionized industries.

Accepted Answer

If labor unions raise wages above the eq

Question 10

Suppose that some country had an adult population of about 50 million, a labor-force participation rate of 60 percent, and an unemployment rate of 5 percent. How many people were employed?

Accepted Answer

A)  1.5 million 
B)  28.5 million 
C)  30 million 
D)  47.5 million 
A)  1.5 million 
B)  28.5 million 
C)  30 million 
D)  47.5 million

Question 11

The Bureau of Labor Statistics' U­5 measure of joblessness is the official unemployment rate.

Accepted Answer

A) True 
 B)False

Question 12

Sectoral shifts contribute to frictional unemployment.

Accepted Answer

A) True 
 B)False

Question 13

Someone who is without work but is not looking for work is included in the Bureau of Labor Statistics' "unemployed" category.

Accepted Answer

A) True 
 B)False

Question 14

Suppose that a well-respected study published in Child Psychology Today finds that a very high proportion of children raised by stay-at-home fathers are accepted to Harvard University. If a large number of previously working fathers quit their jobs and become stay-at-home dads, which of the following will occur, all else equal? i) The unemployment rate will decrease.
Ii) The size of the labor force will decrease.
Iii) The number of unemployed people will increase.
Iv) The unemployment rate will increase.

Accepted Answer

A)  i) and ii) only 
B)  ii) and iv) only 
C)  i), ii), and iii) only 
D)  ii), iii), and iv) only 
A)  i) and ii) only 
B)  ii) and iv) only 
C)  i), ii), and iii) only 
D)  ii), iii), and iv) only

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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 17

When unions raise wages in one part of the economy, the supply of labor increases in other parts of the economy, which reduces wages in industries that are not unionized.

Accepted Answer

A) True 
 B)False

Question 18

The Bureau of Labor Statistics divides the adult population into four categories: employed, underemployed, unemployed, and not in the labor force.

Accepted Answer

A) True 
 B)False

Question 19

Cyclical unemployment refers to

Accepted Answer

A)  the relationship between the probability of unemployment and a worker's changing level of experience. 
B)  how often a worker is likely to be employed during her lifetime. 
C)  year-to-year fluctuations of unemployment around its natural rate. 
D)  long-term trends in unemployment. 
A)  the relationship between the probability of unemployment and a worker's changing level of experience. 
B)  how often a worker is likely to be employed during her lifetime. 
C)  year-to-year fluctuations of unemployment around its natural rate. 
D)  long-term trends in unemployment.

Question 20

The unemployed who quit their jobs, were fired for cause, or just entered the labor force are eligible for unemployment insurance.

Accepted Answer

A) True 
 B)False

Exam 15: Unemployment

Public policy

People who report being unemployed but who, in fact, are working for "under the table" pay to avoid taxes on their earnings are really employed and therefore cause the reported unemployment rate to be higher than it would otherwise be.

Every month, the Bureau of Labor Statistics surveys 160,000 business establishments to help determine the

Employment can rise in one region of the country while it falls in another.

Efficiency wages

The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor market from a regular survey of households called the

Figure 28-4 -Refer to Figure 28-4. If 2,000 workers are unemployed, then the minimum wage must be

Buddy is the owner of a firm that bottles beer in St. Louis, Missouri. There are many other such firms in the area. Buddy decides that if he pays his workers a wage higher than the going market wage, his profits will increase. Which of the following is a likely explanation for his decision?

Briefly describe how labor unions can affect wages in non-unionized industries.

Suppose that some country had an adult population of about 50 million, a labor-force participation rate of 60 percent, and an unemployment rate of 5 percent. How many people were employed?

The Bureau of Labor Statistics' U­5 measure of joblessness is the official unemployment rate.

Sectoral shifts contribute to frictional unemployment.

Someone who is without work but is not looking for work is included in the Bureau of Labor Statistics' "unemployed" category.

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

Frictional unemployment is inevitable because

When unions raise wages in one part of the economy, the supply of labor increases in other parts of the economy, which reduces wages in industries that are not unionized.

The Bureau of Labor Statistics divides the adult population into four categories: employed, underemployed, unemployed, and not in the labor force.

Cyclical unemployment refers to

The unemployed who quit their jobs, were fired for cause, or just entered the labor force are eligible for unemployment insurance.

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

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 Trade-Off Between Inflation and Unemployment

Six Debates Over Macroeconomic Policy

Filters

The Bureau of Labor Statistics' U5 measure of joblessness is the official unemployment rate.