Macroeconomics test bank CH28 Unemployment

1 To maintain their standard of living, most people rely on a government assistance b their labor earnings c their personal savings d All of the above are correct Which of the following is correct? a The amount of unemployment that a country typically experiences is a determinant of that country's standard of living, and some degree of unemployment is inevitable in a complex economy b The amount of unemployment that a country typically experiences is a determinant of that country's standard of living, and a complex economy can achieve zero unemployment c The amount of unemployment that a country typically experiences is not a determinant of that country's standard of living, and a complex economy can achieve zero unemployment d The amount of unemployment that a country typically experiences is not a determinant of that country's standard of living, and some degree of unemployment is inevitable in a complex economy The amount of unemployment that an economy normally experiences is called the a average rate of unemployment b natural rate of unemployment c cyclical rate of unemployment d typical rate of unemployment In the long run the unemployment rate equals a zero b the cyclical rate of unemployment c the natural rate of unemployment d the sum of the cyclical and natural rate of unemployment Cyclical unemployment refers to a the portion of unemployment created by job search b short-run fluctuations around the natural rate of unemployment c changes in unemployment due to changes in the natural rate of unemployment d the portion of unemployment created by wages set above the equilibrium level 6 Cyclical unemployment a has a different explanation than does the natural rate of unemployment b refers to the yeartoyear fluctuation in unemployment around an economy’s natural rate of unemployment c is closely associated with short-run ups and downs of economic activity d All of the above are correct The designation "natural" implies that the natural rate of unemployment a is desirable b is constant over time c is impervious to economic policy d does not go away on its own even in the long run The Bureau of Labor Statistics is part of the U.S Department of a the Treasury b Commerce c Labor d the Interior The Bureau of Labor Statistics produces data on a unemployment b types of employment c length of the average workweek d All of the above are correct 10 The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor market from a regular survey of households called the a Census b Labor Survey c Survey of Economic Indicators d Current Population Survey 11 The Bureau of Labor Statistics produces data on unemployment a weekly b monthly c quarterly d yearly 12 Which of the following is not one of the categories into which the Bureau of Labor Statistics places each adult of each surveyed household? a employed b unemployed c underemployed d not in the labor force 13 Who of the following is not included in the Bureau of Labor Statistics' “employed” category? a those who worked in their own business b those who worked as unpaid workers in a family member's business c those waiting to be recalled to a job from which they had been laid off d those who were temporarily absent from work because of vacation 14 The Bureau of Labor Statistics places people in the “employed” category if they a are temporarily absent from their jobs b are self-employed c work without pay in a family member’s business d All of the above are correct 15 Esmerelda worked parttime for her mother’s business without pay Tabitha was absent from work because she had strep throat Who is counted as “employed” by the Bureau of Labor Statistics? a Esmerelda but not Tabitha b Tabitha but not Esmerelda c both Esmerelda and Tabitha d neither Esmerelda nor Tabitha 16 Who of the following would be included in the Bureau of Labor Statistics’ “unemployed” category? a Juan Carlos, a full-time student who is not looking for work b Kevin, who is on temporary layoff c Andrea, who has retired and is not looking for work d All of the above are correct 17 Who of the following would necessarily be included in the Bureau of Labor Statistics’“unemployed” category? a Huey, who did not work during the previous four weeks b Dewey, who tried to find new employment during the previous four weeks c Louie, who was an unpaid worker during the previous four weeks d None of the above is correct 18 The labor force equals the 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 Table 19 Refer to Table How many in the sample are unemployed? a b c d 20 Refer to Table How many in the sample are in the labor force? a 11 b 10 c d 21 The labor-force participation rate measures the percentage of the a total adult population that is in the labor force b total adult population that is employed c labor force that is employed d labor force that is either employed or unemployed 22 Which of the following is correct? 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 ữ adult population ì 100 23 The labor-force participation rate is computed as a (Employed ữ Adult Population) ì 100 b (Employed ữ Labor Force) ì 100 c (Labor Force ữ Adult Population) ì 100 d (Adult Population ữ Labor Force) × 100 24 Satchel loses his job and immediately begins looking for another Other things the same, the unemployment rate a increases, and the labor-force participation rate decreases b and the labor-force participation rate both increase c increases, and the labor-force participation rate is unaffected d is unaffected, and the labor-force participation rate decreases 25 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 a (i) and (ii) only b (ii) and (iv) only c (i), (ii), and (iii) only d (ii), (iii), and (iv) only 26 All else equal, which of the following would increase the unemployment rate? (i) an increase in the number of women who return to work after being stay-at-home mothers (ii) a preference among older men to retire early (iii) an increase in the maximum number of weeks for which someone can receive government unemployment benefits (iv) an increase in the number of previously unemployed women who stop looking for work and become discouraged workers a (i) and (ii) only b (iii) only c (ii) and (iii) only d (ii), (iii), and (iv) only 27 The Bureau of Labor Statistics reported in 2005 that there were 28.19 million people over age 25who had no high school degree or its equivalent, 11.73 million of whom were employed and 1.04 million of whom were unemployed What were the labor-force participation rate and the unemployment rate for this group? a 45.3% and 3.7% b 45.3% and 8.1% c 41.6% and 3.7% d 41.6% and 8.1% 28 Suppose that the adult population is million, the number of unemployed is 0.25 million, and the labor-force participation rate is 75% What is the unemployment rate? a 6.25% b 8.3% c 9.1% d 18.75% 29 Suppose that some country had an adult population of about 50 million, a laborforce participation rate of 60 percent, and an unemployment rate of percent How many people were employed? a 1.5 million b 28.5 million c 30 million d 47.5 million Table 30 Refer to Table How many people were employed in Baltivia in 2009? a 9,600 b 10,600 c 11,000 d 11,200 31 Refer to Table How many people were unemployed in Baltivia in 2009? a 1,400 b 1,600 c 2,000 d 2,780 32 Refer to Table How many people were in Baltivia’s labor force in 2009? a 11,000 b 12,600 c 13,380 d 20,000 33 Refer to Table How many adults were not in Baltivia’s labor force in 2009? a 4,400 b 6,620 c 7,400 d 8,690 34 Refer to Table What was Baltivia’s unemployment rate in 2009? a 8.0% b 12.7% c 15.9% d 22.1% 35 Refer to Table What was Baltivia’s laborforce participation rate in 2009? a 55% b 63% c 66.9% d 87.3% Table 36 Refer to Table In the proper order, which age group has the highest unemployment rate and which has the highest participation rate? a under 55, under 55 b under 55, 55 and older c 55 and older, under 55 d 55 and older, 55 and older 37 Refer to Table 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 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 38 People who are unemployed because they are in search of a job that suits their skills are included within a structural unemployment b frictional unemployment c cyclical unemployment d marginal unemployment 39 A person who is not employed and claims to be trying hard to find a job but really is not trying hard to find a job is a counted as out of the labor force but should be counted as unemployed b counted as unemployed but should be counted as out of the labor force c correctly counted as out of the labor force d correctly counted as unemployed 40 Suppose that some people are counted as unemployed when, to maintain unemployment compensation, they search for work only at places where they are unlikely to be hired If these individuals were counted as out of the labor force instead of as unemployed, then a both the unemployment rate and labor-force participation rate would be higher b both the unemployment rate and labor-force participation rate would be lower c the unemployment rate would be lower, and the labor-force participation rate would be higher d the unemployment rate would be higher, and the labor-force participation rate would be lower 41 Some persons are counted as out of the labor force because they have made no serious or recent effort to look for work However, some of these individuals may want to work even though they are too discouraged to make a serious effort to look for work If these individuals were counted as unemployed instead of out of the labor force, then a both the unemployment rate and labor-force participation rate would be higher b the unemployment rate would be higher ,and the labor-force participation rate would be lower c the unemployment rate would be lower, and the labor-force participation rate would be higher d both the unemployment rate and labor-force participation rate would be lower 42 The reported unemployment rate should be viewed as a a useful but imperfect measure of joblessness b clearly smaller than the true unemployment rate c clearly larger than the true unemployment rate d being very close to the true unemployment rate 43 Most spells of unemployment are a long, and most unemployment observed at any given time is long term b long, but most unemployment observed at any given time is short term c short, but most unemployment observed at any given time is long term d short, and most unemployment observed at any given time is short term 44 Which of the following is correct? a Typically more than one-third of the unemployed are new entrants into the job market b Most spells of unemployment are short c Most unemployment observed at any time is long term d All of the above are correct 45 In one year, you meet 52 people who are each unemployed for one week and eight people who are each unemployed for the whole year What percentage of the unemployment spells you encountered was short term, and what percentage of the unemployment you encountered in a given week was long term? a 52% was short term; 13.3% was long term b 52% was short term; 88.9% was long term c 86.7% was short term; 13.3 was long term d 86.7% was short term; 88.9 was long term 46 Unemployment that results because the number of jobs available in some labor markets may be insufficient to give a job to everyone who wants one is called a the natural rate of unemployment b cyclical unemployment c structural unemployment d frictional unemployment 47 Unemployment insurance tends to a decrease structural unemployment b decrease cyclical unemployment c increase frictional unemployment d increase the number of discouraged workers 48 Suppose that dental hygienists are unionized in the eastern region of the country but not in the western region If the unionized workers in the eastern region abolished their unions, employment a and wages of dental hygienists in the eastern region would rise b of dental hygienists in the eastern region would rise, but wages of dental hygienists in the eastern region would fall c and wages of dental hygienists in the eastern region would fall d of dental hygienists in the eastern region would fall, but wages of dental hygienists in the eastern region would rise 49 There is a clear consensus among economists that unions are a good for the economy because they result in higher wages for most workers b good for the economy because they are a necessary antidote to the market power of employers c bad for the economy because they are cartels and therefore detrimental to an efficient allocation of resources d None of the above is correct; there is no clear consensus among economists about whether unions are good or bad for the economy 50 The theory of efficiency wages provides a possible explanation as to why a workers form unions b firms should try to reduce surpluses of labor c firms may be inclined to keep their workers’ wages above the equilibrium level d firms may be inclined to keep their workers’ wages below the equilibrium level  ... unemployment b cyclical unemployment c structural unemployment d frictional unemployment 47 Unemployment insurance tends to a decrease structural unemployment b decrease cyclical unemployment c increase... than the true unemployment rate c clearly larger than the true unemployment rate d being very close to the true unemployment rate 43 Most spells of unemployment are a long, and most unemployment. .. Cyclical unemployment a has a different explanation than does the natural rate of unemployment b refers to the yeartoyear fluctuation in unemployment around an economy’s natural rate of unemployment