Question 1

The natural rate of unemployment
I is the economy's desirable level of unemployment.
Ii)  arises from a single problem that has a single solution.
Iii is the amount of unemployment that does not go away on its own.

Accepted Answer

A)   i)  and ii)  only
B)   iii)  only
C)   i) , ii) , and iii) 
D)   None of the above is correct.E) A) and B)
F) B) and D)

Question 2

According to 2012 data on the U.S. population, which of the following groups of adults of prime working age ages 25-54)  had the lowest labor-force participation rate?

Accepted Answer

A)   white males
B)   white females
C)   black males
D)   black femalesE) A) and D)
F) All of the above

Question 3

Which famous company executive introduced an innovative pay system that is consistent with the theory of efficiency wages?

Accepted Answer

A)   Lee Iococca
B)   Steve Jobs
C)   Mark Zuckerberg
D)   Henry FordE) B) and C)
F) All of the above

Question 4

Every month when the Bureau of Labor Statistics BLS)  announces the unemployment rate, it also announces the number of jobs the economy has gained or lost. Where does the BLS get the data about jobs?

Accepted Answer

A)   from the survey of 60,000 households, which is called the Current Population Survey
B)   from the Establishment Survey that measures both frictional and structural unemployment
C)   from the survey of 160,000 business that have over 40 million workers on their payrolls
D)   from the Congressional Budget Office, which also calculates the GDP of the United StatesE) A) and B)
F) B) and C)

Question 5

Eric was laid off two months ago. He has not searched for other work because he is expecting to be recalled to work. The Bureau of Labor Statistics counts Eric 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)   not in the labor force.E) A) and B)
F) A) and D)

Question 6

Unemployment insurance

Accepted Answer

A)   reduces the hardship of unemployment, but it also increases the amount of unemployment.
B)   reduces the incentive for the unemployed to find and take new jobs.
C)   causes workers to be less likely to seek guarantees of job security when they negotiate with employers over the terms of employment.
D)   All of the above are correct.E) None of the above
F) B) and D)

Question 7

Over the past several decades, the difference between the labor-force participation rates of men and women in the U.S. has

Accepted Answer

A)   gradually increased.
B)   remained constant.
C)   gradually decreased.
D)   been eliminated.E) A) and D)
F) All of the above

Question 8

Which of the following is not correct?

Accepted Answer

A)   Most people who become unemployed will soon find jobs.
B)   In an ideal labor market, wages would adjust to ensure that all workers are always fully employed.
C)   The unemployment rate occasionally falls to zero.
D)   There are always some workers without jobs, even when the overall economy is doing well.E) A) and C)
F) A) and D)

Question 9

When a union is present in a labor market, wages are not determined by the equilibrium of supply and demand.

Accepted Answer

A) True 
 B)False

Question 10

The deviation of unemployment from its natural rate is called

Accepted Answer

A)   the economic rate of unemployment.
B)   cyclical unemployment.
C)   frictional unemployment.
D)   structural unemployment.E) A) and B)
F) All of the above

Question 11

The designation "natural" implies that the natural rate of unemployment

Accepted Answer

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.E) A) and C)
F) A) and B)

Question 12

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 unemployed?

Accepted Answer

A)   0.846 million
B)   0.9 million
C)   1.5 million
D)   6 millionE) B) and D)
F) All of the above

Question 13

The destruction of manufacturing jobs and workers leaving their jobs to find better ones both contribute to structural unemployment.

Accepted Answer

A) True 
 B)False

Question 14

What problems arise in interpreting unemployment data?

Accepted Answer

Because people move into and out of the ...

Question 15

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 millionE) None of the above
F) B) and D)

Question 16

Who is not included in the labor force by the Bureau of Labor Statistics?

Accepted Answer

A)   Anita, who is on temporary layoff
B)   Lauren, who has retired and is not looking for work
C)   Raymond, who does not have a job but has applied for several in the last week
D)   None of the above is correct.E) A) and B)
F) A) and C)

Question 17

The adult population in the town of Shelbyville is 150 thousand. If 100 thousand people are employed and 20 thousand are unemployed, then the labor force participation rate is approximately

Accepted Answer

A)   67%.
B)   80%.
C)   16%.
D)   13%.E) C) and D)
F) A) and B)

Question 18

Over the past several decades in the United States, the labor-force participation rate of women has

Accepted Answer

A)   increased, and the labor-force participation rate of men has increased.
B)   increased, and the labor-force participation rate of men has decreased.
C)   decreased, and the labor-force participation rate of men has increased.
D)   decreased, and the labor-force participation rate of men has decreased.E) A) and B)
F) A) and C)

Question 19

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.E) A) and C)
F) All of the above

Question 20

Public policy can reduce the economy's natural rate of unemployment.

Accepted Answer

A) True 
 B)False

Exam 10: Unemployment and Its Natural Rate

Every month when the Bureau of Labor Statistics BLS) announces the unemployment rate, it also announces the number of jobs the economy has gained or lost. Where does the BLS get the data about jobs?

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The destruction of manufacturing jobs and workers leaving their jobs to find better ones both contribute to structural unemployment.

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Unemployment insurance

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Which of the following is not correct?

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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 unemployed?

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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?

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Over the past several decades in the United States, the labor-force participation rate of women has

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Which famous company executive introduced an innovative pay system that is consistent with the theory of efficiency wages?

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Eric was laid off two months ago. He has not searched for other work because he is expecting to be recalled to work. The Bureau of Labor Statistics counts Eric as

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Who is not included in the labor force by the Bureau of Labor Statistics?

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The adult population in the town of Shelbyville is 150 thousand. If 100 thousand people are employed and 20 thousand are unemployed, then the labor force participation rate is approximately

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The deviation of unemployment from its natural rate is called

Correct AnswerverifiedShow Answer

The designation "natural" implies that the natural rate of unemployment

Correct AnswerverifiedShow Answer

Over the past several decades, the difference between the labor-force participation rates of men and women in the U.S. has

Correct AnswerverifiedShow Answer

According to 2012 data on the U.S. population, which of the following groups of adults of prime working age ages 25-54) had the lowest labor-force participation rate?

Correct AnswerverifiedShow Answer

The natural rate of unemployment I is the economy's desirable level of unemployment. Ii) arises from a single problem that has a single solution. Iii is the amount of unemployment that does not go away on its own.

Correct AnswerverifiedShow Answer

What problems arise in interpreting unemployment data?

Correct AnswerverifiedBecause people move into and out of the ...View AnswerShow Answer

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?

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Public policy can reduce the economy's natural rate of unemployment.

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When a union is present in a labor market, wages are not determined by the equilibrium of supply and demand.

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Because people move into and out of the ...
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