Question 1

Rigidity of employment index summarizes the difficulty of training new workers in a specific industry.

Accepted Answer

A) True 
 B)False

Question 2

What factors might increase structural unemployment and what factors might decrease structural unemployment in a given country?

Accepted Answer

Factors that increase structural unemplo...

Question 3

The short-term unemployment caused by the ordinary difficulties of matching employee to employer is called:

Accepted Answer

A)   frictional unemployment.
B)   structural unemployment.
C)   cyclical unemployment.
D)   seasonal unemployment.

Question 4

An unemployed person is one who:

Accepted Answer

A)   stays at home and is not looking for work.
B)   works for a job that pays less than he or she expected.
C)   is not willing to work even though he or she is able to.
D)   does not have a job but is actively looking for one.

Question 5

What type of unemployment can increase or decrease dramatically in a few months?

Accepted Answer

A)   frictional
B)   structural
C)   cyclical
D)   frictional, structural, and cyclical

Question 6

A discouraged worker is a:

Accepted Answer

A)   person working for fewer hours than he or she prefers.
B)   worker being discouraged by his or her employer when asking for a promotion.
C)   person who has given up looking for work but would still like a job if one is available.
D)   unemployed person who has temporary part-time employment.

Question 7

The aging of the population typically results in a lower labor force participation rate as well as higher taxes for younger workers.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following individuals can be counted as part of the labor force?

Accepted Answer

A)   someone who retired 4 months ago
B)   someone who is collecting unemployment benefits
C)   someone who just celebrated a fifteenth birthday
D)   someone who is on active military duty in Afghanistan

Question 9

Which of the following individuals can be counted as unemployed?

Accepted Answer

A)   a woman who works only part time
B)   a temp worker, who is currently responding to job advertisements from the newspaper
C)   a man who was laid off from an auto manufacturing plant in Detroit
D)   a husband who stays at home to raise his two children

Question 10

Higher implicit tax rates tend to cause labor force participation rates to:

Accepted Answer

A)   remain constant.
B)   increase.
C)   decrease.
D)   behave unpredictably.

Question 11

If the equilibrium wage is $9 in the market for hotel workers and $8 in the market for restaurant workers and both markets have similar elasticities of labor supply and demand, then a minimum wage of $4 in both markets will:

Accepted Answer

A)   cause more unemployment among hotel workers than restaurant workers.
B)   cause more unemployment among restaurant workers than restaurant workers.
C)   cause the same amount of unemployment in both markets.
D)   have no effect in either market.

Question 12

What is the term for workers who have given up looking for a job but would still like one?

Accepted Answer

A)   jobless workers
B)   discouraged workers
C)   laid off workers
D)   discarded workers

Question 13

A taxi driver with a PhD in chemistry counts as fully employed.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is NOT true regarding the natural rate of unemployment?

Accepted Answer

A)   The natural rate of unemployment equals the sum of the frictional and structural rates.
B)   If the economy is operating at the natural rate of unemployment, cyclical unemployment is equal to zero.
C)   The natural rate of unemployment correlates positively with the level of GDP growth in an economy.
D)   The actual rate of unemployment varies around the natural rate over time.

Question 15

Compared to the United States, unemployment rates in Western Europe tend to be:

Accepted Answer

A)   lower because of more labor regulations.
B)   lower because of fewer labor regulations.
C)   higher because of more labor regulations.
D)   higher because of fewer labor regulations.

Question 16

An increase in unemployment benefits tends to:

Accepted Answer

A)   lower the incentive to search for a job and raise structural unemployment.
B)   lower the incentive to search for a job and lower structural unemployment.
C)   raise the incentive to search for a job and raise structural unemployment.
D)   raise the incentive to search for a job and lower structural unemployment.

Question 17

In a nonrecession year, the majority of U.S. unemployment is:

Accepted Answer

A)   frictional.
B)   structural.
C)   cyclical.
D)   recurrent.

Question 18

Creative destruction occurs at the level of the:

Accepted Answer

A)   firm.
B)   industry.
C)   entire economy.
D)   firm, industry, and entire economy.

Question 19

Which of the following elements reduces structural unemployment?

Accepted Answer

A)   the enhancement of worker retraining programs
B)   the extension of unemployment benefits
C)   the growth of labor unions
D)   the existence of employment protection laws

Question 20

The natural unemployment rate is the sum of the structural and frictional unemployment rates.

Accepted Answer

A) True 
 B)False

Exam 11: Unemployment and Labor Force Participation

Which of the following is NOT true regarding the natural rate of unemployment?

Correct AnswerverifiedShow Answer

What is the term for workers who have given up looking for a job but would still like one?

Correct AnswerverifiedShow Answer

In a nonrecession year, the majority of U.S. unemployment is:

Correct AnswerverifiedShow Answer

If the equilibrium wage is $9 in the market for hotel workers and $8 in the market for restaurant workers and both markets have similar elasticities of labor supply and demand, then a minimum wage of $4 in both markets will:

Correct AnswerverifiedShow Answer

The aging of the population typically results in a lower labor force participation rate as well as higher taxes for younger workers.

Correct AnswerverifiedShow Answer

Higher implicit tax rates tend to cause labor force participation rates to:

Correct AnswerverifiedShow Answer

Compared to the United States, unemployment rates in Western Europe tend to be:

Correct AnswerverifiedShow Answer

A discouraged worker is a:

Correct AnswerverifiedShow Answer

Creative destruction occurs at the level of the:

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Rigidity of employment index summarizes the difficulty of training new workers in a specific industry.

Correct AnswerverifiedShow Answer

A taxi driver with a PhD in chemistry counts as fully employed.

Correct AnswerverifiedShow Answer

What factors might increase structural unemployment and what factors might decrease structural unemployment in a given country?

Correct AnswerverifiedFactors that increase structural unemplo...View AnswerShow Answer

Which of the following individuals can be counted as part of the labor force?

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Which of the following elements reduces structural unemployment?

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The natural unemployment rate is the sum of the structural and frictional unemployment rates.

Correct AnswerverifiedShow Answer

An unemployed person is one who:

Correct AnswerverifiedShow Answer

Which of the following individuals can be counted as unemployed?

Correct AnswerverifiedShow Answer

What type of unemployment can increase or decrease dramatically in a few months?

Correct AnswerverifiedShow Answer

The short-term unemployment caused by the ordinary difficulties of matching employee to employer is called:

Correct AnswerverifiedShow Answer

An increase in unemployment benefits tends to:

Correct AnswerverifiedShow Answer

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Factors that increase structural unemplo...
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