Question 1

Unemployment insurance is designed to offer workers full protection against job loss.

Accepted Answer

A) True 
 B)False

Question 2

Studies have shown that the design of the unemployment insurance system reduces the job search effort of the unemployed.

Accepted Answer

A) True 
 B)False

Question 3

The labor-force participation rate tells us the fraction of the population that has chosen to participate in the labor market.

Accepted Answer

A) True 
 B)False

Question 4

Access to which of the following explains the lower growth rate for the American economy in the 21st century compared to the previous 250 years?

Accepted Answer

A)  food stamps 
B)  Social Security disability payments 
C)  Pell grants 
D)  All of the above are correct. 
A)  food stamps 
B)  Social Security disability payments 
C)  Pell grants 
D)  All of the above are correct.

Question 5

Suppose that because of the popularity of the low-carb diet, bakeries need fewer workers and steak houses need more workers. The unemployment created by this change is

Accepted Answer

A)  frictional unemployment created by efficiency wages. 
B)  frictional unemployment created by sectoral shifts. 
C)  structural unemployment created by efficiency wages. 
D)  structural unemployment created by sectoral shifts. 
A)  frictional unemployment created by efficiency wages. 
B)  frictional unemployment created by sectoral shifts. 
C)  structural unemployment created by efficiency wages. 
D)  structural unemployment created by sectoral shifts.

Question 6

Labor unions

Accepted Answer

A)  prefer to operate in states with right-to-work laws. 
B)  are similar to cartels. 
C)  play a larger role in the current U.S. economy than in European countries such as Norway and Sweden. 
D)  attract a membership of about 25 percent of current U.S. workers. 
A)  prefer to operate in states with right-to-work laws. 
B)  are similar to cartels. 
C)  play a larger role in the current U.S. economy than in European countries such as Norway and Sweden. 
D)  attract a membership of about 25 percent of current U.S. workers.

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

Workers in unions reap the benefit of collective bargaining, while workers not in unions bear some of the cost.

Accepted Answer

A) True 
 B)False

Question 9

Table 28-5
Labor Force Statistics by Age
Suppose people in the adult population in a small country are classified based on their age.  
-Refer to Table 28-5. Suppose that the natural rate of unemployment is 5% for those under 55 and 3% for those 55 and older. The cyclical unemployment rate for those under 55 is

Accepted Answer

A)  0.88% which is greater than the cyclical unemployment rate for those 55 and older. 
B)  0.88% which is less than the cyclical unemployment rate for those 55 and older. 
C)  -0.83% which is greater than the cyclical unemployment rate for those 55 and older. 
D)  -0.83% which is less than the cyclical unemployment rate for those 55 and older. 
A)  0.88% which is greater than the cyclical unemployment rate for those 55 and older. 
B)  0.88% which is less than the cyclical unemployment rate for those 55 and older. 
C)  -0.83% which is greater than the cyclical unemployment rate for those 55 and older. 
D)  -0.83% which is less than the cyclical unemployment rate for those 55 and older.

Question 10

If the wage is kept above the equilibrium wage for any reason, the result is structural unemployment.

Accepted Answer

A) True 
 B)False

Question 11

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 12

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 13

Unemployment data are collected

Accepted Answer

A)  from unemployment insurance claims. 
B)  through a regular survey of about 60,000 households. 
C)  through a regular survey of about 200,000 firms. 
D)  All of the above are correct. 
A)  from unemployment insurance claims. 
B)  through a regular survey of about 60,000 households. 
C)  through a regular survey of about 200,000 firms. 
D)  All of the above are correct.

Question 14

Sandy has graduated from college and is devoting her time to searching for a job. She has seen plenty of openings but has not yet been offered one that best suits her tastes and skills. Sandy is

Accepted Answer

A)  structurally unemployed. Structural unemployment exists even in the long run. 
B)  structurally unemployed. There is no structural unemployment in the long run. 
C)  frictionally unemployed. Frictional unemployment exists even in the long run. 
D)  frictionally unemployed. There is no frictional unemployment in the long run. 
A)  structurally unemployed. Structural unemployment exists even in the long run. 
B)  structurally unemployed. There is no structural unemployment in the long run. 
C)  frictionally unemployed. Frictional unemployment exists even in the long run. 
D)  frictionally unemployed. There is no frictional unemployment in the long run.

Question 15

Figure 28-2  
-Refer to Figure 28-2. What do the two lines in the figure measure?

Accepted Answer

A)  The top line is the labor force participation rate, and the bottom line is the unemployment rate. 
B)  The top line is the labor force participation rates of the college-educated population, and bottom line is the labor force participation rates of the high-school-educated population. 
C)  The top line is the foreign labor force participation rate, and the bottom line is the domestic labor force participation rate. 
D)  The top line is the labor force participation rates of men, and the bottom line is the labor force participation rates of women. 
A)  The top line is the labor force participation rate, and the bottom line is the unemployment rate. 
B)  The top line is the labor force participation rates of the college-educated population, and bottom line is the labor force participation rates of the high-school-educated population. 
C)  The top line is the foreign labor force participation rate, and the bottom line is the domestic labor force participation rate. 
D)  The top line is the labor force participation rates of men, and the bottom line is the labor force participation rates of women.

Question 16

Within the U.S. population, teenagers (ages 16-19) have similar rates of labor-force participation than adults of prime working age (ages 25-54), regardless of race or gender.

Accepted Answer

A) True 
 B)False

Question 17

Jamarcus works part-time as a pizza delivery person in a college town. The Bureau of Labor Statistics counts Jamarcus as

Accepted Answer

A)  unemployed and in the labor force. 
B)  unemployed and not in the labor force. 
C)  employed and in the labor force. 
D)  employed and not in the labor force. 
A)  unemployed and in the labor force. 
B)  unemployed and not in the labor force. 
C)  employed and in the labor force. 
D)  employed and not in the labor force.

Question 18

If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7 percent, then by definition there is

Accepted Answer

A)  cyclical unemployment amounting to 0.5 percent of the labor force. 
B)  frictional unemployment amounting to 0.5 percent of the labor force. 
C)  structural unemployment amounting to 0.5 percent of the labor force. 
D)  search unemployment amounting to 0.5 percent of the labor force. 
A)  cyclical unemployment amounting to 0.5 percent of the labor force. 
B)  frictional unemployment amounting to 0.5 percent of the labor force. 
C)  structural unemployment amounting to 0.5 percent of the labor force. 
D)  search unemployment amounting to 0.5 percent of the labor force.

Question 19

Suppose that some country had an adult population of about 25 million, a labor-force participation rate of 60 percent, and an unemployment rate of 6 percent. How many people were employed?

Accepted Answer

A)  0.9 million 
B)  14.1 million 
C)  15 million 
D)  23.5 million 
A)  0.9 million 
B)  14.1 million 
C)  15 million 
D)  23.5 million

Question 20

The process by which unions and firms agree on the terms of employment is called collective bargaining.

Accepted Answer

A) True 
 B)False

Exam 28: Unemployment

Unemployment insurance is designed to offer workers full protection against job loss.

Studies have shown that the design of the unemployment insurance system reduces the job search effort of the unemployed.

The labor-force participation rate tells us the fraction of the population that has chosen to participate in the labor market.

Access to which of the following explains the lower growth rate for the American economy in the 21st century compared to the previous 250 years?

Suppose that because of the popularity of the low-carb diet, bakeries need fewer workers and steak houses need more workers. The unemployment created by this change is

Labor unions

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

Workers in unions reap the benefit of collective bargaining, while workers not in unions bear some of the cost.

If the wage is kept above the equilibrium wage for any reason, the result is structural unemployment.

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

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

Unemployment data are collected

Sandy has graduated from college and is devoting her time to searching for a job. She has seen plenty of openings but has not yet been offered one that best suits her tastes and skills. Sandy is

Figure 28-2 -Refer to Figure 28-2. What do the two lines in the figure measure?

Within the U.S. population, teenagers (ages 16-19) have similar rates of labor-force participation than adults of prime working age (ages 25-54), regardless of race or gender.

Jamarcus works part-time as a pizza delivery person in a college town. The Bureau of Labor Statistics counts Jamarcus as

If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7 percent, then by definition there is

Suppose that some country had an adult population of about 25 million, a labor-force participation rate of 60 percent, and an unemployment rate of 6 percent. How many people were employed?

The process by which unions and firms agree on the terms of employment is called collective bargaining.

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 Design of the Tax System

The Costs of Production

Firms in Competitive Markets

Monopoly

Monopolistic Competition

Oligopoly

The Markets for the Factors of Production

Earnings and Discrimination

Income Inequality and Poverty

The Theory of Consumer Choice

Frontiers of Microeconomics

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

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