Question 1

If the minimum wage were currently above the equilibrium wage, then a decrease in the minimum wage that kept it above the equilibrium wage would

Accepted Answer

A)   increase the surplus of labor.
B)   reduce the surplus of labor.
C)   increase the shortage of labor.
D)   reduce the shortage of labor,E) A) and D)
F) C) and D)

Question 2

The Bureau of Labor Statistics' U­5 measure of joblessness includes marginally attached workers.

Accepted Answer

A) True 
 B)False

Question 3

The Bureau of Labor Statistics computes unemployment rates for the entire adult population and for more narrowly defined groups.

Accepted Answer

A) True 
 B)False

Question 4

Public policy can reduce frictional unemployment.

Accepted Answer

A) True 
 B)False

Question 5

Who would be included in the labor force?

Accepted Answer

A)   Maggie, who plans to work at the newspaper next year when she turns 16 years old.
B)   Lisa, who is unhappy with her current job.
C)   Bart, who is a full-time student and uninterested in finding employment.
D)   None of the above is correct.E) A) and B)
F) A) and C)

Question 6

In the long run the unemployment rate equals

Accepted Answer

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.E) B) and D)
F) B) and C)

Question 7

The natural rate of unemployment is closely associated with the short-run ups and downs of economic activity.

Accepted Answer

A) True 
 B)False

Question 8

Provide a definition of the natural rate of unemployment.

Accepted Answer

The amount of unempl...

Question 9

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 unemployment rate?

Accepted Answer

A)   white males
B)   white females
C)   black males
D)   black femalesE) None of the above
F) A) and B)

Question 10

There are always some workers without jobs, even when the overall economy is doing well.

Accepted Answer

A) True 
 B)False

Question 11

The Bureau of Labor Statistics places people in the "employed" category if they

Accepted Answer

A)   are without a job, but are available for work and have tried to find a job during the previous four weeks.
B)   work without pay in a family member's business.
C)   are waiting to be recalled to a job from which they had been laid off.
D)   All of the above are correct.E) All of the above
F) B) and D)

Question 12

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

Question 13

The demand for labor by a certain firm fluctuates as the demand for that firm's product fluctuates.

Accepted Answer

A) True 
 B)False

Question 14

The Bureau of Labor Statistics defines the unemployment rate as the percentage of

Accepted Answer

A)   those unemployed relative to those employed.
B)   the labor force that is unemployed.
C)   the adult population that is unemployed.
D)   the adult population that is unemployed or not in the labor force.E) A) and B)
F) A) and D)

Question 15

Explain the effect of right-to-work laws on the collective bargaining power of labor unions.

Accepted Answer

Right-to-work laws decrease th...

Question 16

Unemployment generated by the existence of labor unions is structural unemployment and so contributes to the natural rate of unemployment.

Accepted Answer

A) True 
 B)False

Question 17

People who are unemployed because wages are, for some reason, set above the level that brings labor supply and demand into equilibrium are best classified as

Accepted Answer

A)   cyclically unemployed.
B)   structurally unemployed.
C)   frictionally unemployed.
D)   discouraged workers.E) B) and D)
F) A) and B)

Question 18

Unions

Accepted Answer

A)   do not affect the natural rate of unemployment.
B)   lower the wages of unionized workers.
C)   raise the profits of unionized firms.
D)   lower the wages of workers in industries without unions.E) A) and B)
F) A) and C)

Question 19

Briefly compare the structural unemployment that arises from minimum-wage laws to the frictional unemployment that arises from the process of job search.

Accepted Answer

Minimum-wage laws create unemployment be...

Question 20

Other things the same, an increase in wages above their equilibrium level

Accepted Answer

A)   increases frictional unemployment but leaves the natural rate of unemployment unchanged.
B)   increases frictional unemployment and increases the natural rate of unemployment.
C)   increases structural unemployment but leaves the natural rate of unemployment unchanged.
D)   increases structural unemployment and increases the natural rate of unemployment.E) B) and C)
F) A) and D)

Exam 10: Unemployment and Its Natural Rate

The Bureau of Labor Statistics defines the unemployment rate as the percentage of

Correct AnswerverifiedShow Answer

Provide a definition of the natural rate of unemployment.

Correct AnswerverifiedThe amount of unempl...View AnswerShow Answer

Briefly compare the structural unemployment that arises from minimum-wage laws to the frictional unemployment that arises from the process of job search.

Correct AnswerverifiedMinimum-wage laws create unemployment be...View AnswerShow Answer

In the long run the unemployment rate equals

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The Bureau of Labor Statistics' U­5 measure of joblessness includes marginally attached workers.

Correct AnswerverifiedShow Answer

People who are unemployed because wages are, for some reason, set above the level that brings labor supply and demand into equilibrium are best classified as

Correct AnswerverifiedShow Answer

Other things the same, an increase in wages above their equilibrium level

Correct AnswerverifiedShow Answer

Who would be included in the labor force?

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The natural rate of unemployment is closely associated with the short-run ups and downs of economic activity.

Correct AnswerverifiedShow Answer

The Bureau of Labor Statistics places people in the "employed" category if they

Correct AnswerverifiedShow Answer

Explain the effect of right-to-work laws on the collective bargaining power of labor unions.

Correct AnswerverifiedRight-to-work laws decrease th...View AnswerShow Answer

The demand for labor by a certain firm fluctuates as the demand for that firm's product fluctuates.

Correct AnswerverifiedShow Answer

The Bureau of Labor Statistics computes unemployment rates for the entire adult population and for more narrowly defined groups.

Correct AnswerverifiedShow Answer

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

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 unemployment rate?

Correct AnswerverifiedShow Answer

If the minimum wage were currently above the equilibrium wage, then a decrease in the minimum wage that kept it above the equilibrium wage would

Correct AnswerverifiedShow Answer

Unions

Correct AnswerverifiedShow Answer

Public policy can reduce frictional unemployment.

Correct AnswerverifiedShow Answer

Unemployment generated by the existence of labor unions is structural unemployment and so contributes to the natural rate of unemployment.

Correct AnswerverifiedShow Answer

There are always some workers without jobs, even when the overall economy is doing well.

Correct AnswerverifiedShow Answer

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The amount of unempl...
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Minimum-wage laws create unemployment be...
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The Bureau of Labor Statistics' U5 measure of joblessness includes marginally attached workers.

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Correct Answer
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Right-to-work laws decrease th...
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