Question 1

Which of the following is true?

Accepted Answer

A)  Unemployment rates for young people in the United States are sometimes higher, sometimes lower, and sometimes the same as those for older people, depending on the cyclical fluctuations in the economy. 
B)  Unemployment rates for young people in the United States are the same as those for older people. 
C)  Unemployment rates for young people in the United States are lower than those for older people. 
D)  Unemployment rates for young people in the United States are higher than those for older people. 
E)  Unemployment among young people is not a problem in the United States. 
A)  Unemployment rates for young people in the United States are sometimes higher, sometimes lower, and sometimes the same as those for older people, depending on the cyclical fluctuations in the economy. 
B)  Unemployment rates for young people in the United States are the same as those for older people. 
C)  Unemployment rates for young people in the United States are lower than those for older people. 
D)  Unemployment rates for young people in the United States are higher than those for older people. 
E)  Unemployment among young people is not a problem in the United States. D

Question 2

Of the unemployment rate, the employment-to-population ratio, and the labor force participation rate, which of the three is(are) unaffected by the discouraged worker phenomenon?

Accepted Answer

A)  Only the unemployment rate 
B)  Both the unemployment rate and the employment-to-population ratio 
C)  Only the employment-to-population ratio 
D)  Only the labor force participation rate 
E)  Both the unemployment rate and the labor force participation rate 
A)  Only the unemployment rate 
B)  Both the unemployment rate and the employment-to-population ratio 
C)  Only the employment-to-population ratio 
D)  Only the labor force participation rate 
E)  Both the unemployment rate and the labor force participation rate C

Question 3

According to the job-search explanation of unemployment,

Accepted Answer

A)  the equilibrium level of unemployment is constant. 
B)  the demand for labor is fixed. 
C)  the equilibrium amount of employment constantly fluctuates. 
D)  the supply of labor is fixed. 
E)  the unemployment rate should tend toward zero. 
A)  the equilibrium level of unemployment is constant. 
B)  the demand for labor is fixed. 
C)  the equilibrium amount of employment constantly fluctuates. 
D)  the supply of labor is fixed. 
E)  the unemployment rate should tend toward zero. C

Question 4

Economists agree that the natural rate of unemployment increased during the 1970s. Which of the following has been attributed as a likely reason for this phenomenon?

Accepted Answer

A)  The high influx of foreign workers during that time 
B)  The dramatic changes in the economy due to the so-called "green revolution" 
C)  The influx of young baby boom workers into the labor force at that time 
D)  The Vietnam War 
E)  The increase in interest rates by the Fed 
A)  The high influx of foreign workers during that time 
B)  The dramatic changes in the economy due to the so-called "green revolution" 
C)  The influx of young baby boom workers into the labor force at that time 
D)  The Vietnam War 
E)  The increase in interest rates by the Fed

Question 5

The unemployment rate, the labor force participation rate, and the employment-to-population ratio have the same measurement difficulties that the labor force does.

Accepted Answer

A) True 
 B)False

Question 6

An individual who only works 11 months out of a year is classified as a part-time worker.

Accepted Answer

A) True 
 B)False

Question 7

Discouraged workers are not part of the labor force.

Accepted Answer

A) True 
 B)False

Question 8

Housewives are generally not counted as part of the labor force.

Accepted Answer

A) True 
 B)False

Question 9

Usually on the first Friday of each month, the U.S. Department of Labor releases information about employment and unemployment in the previous month.

Accepted Answer

A) True 
 B)False

Question 10

The unemployment rate in the absence of cyclical increases or decreases in the economy is known as

Accepted Answer

A)  the natural rate of unemployment. 
B)  the anticyclical employment rate. 
C)  the structural rate of unemployment. 
D)  the absence unemployment rate. 
E)  None of these 
A)  the natural rate of unemployment. 
B)  the anticyclical employment rate. 
C)  the structural rate of unemployment. 
D)  the absence unemployment rate. 
E)  None of these

Question 11

Students entering the labor force for the first time in June cause

Accepted Answer

A)  no change in unemployment. 
B)  a cyclical increase in unemployment. 
C)  a cyclical decrease in unemployment. 
D)  a seasonal decrease in unemployment. 
E)  a seasonal increase in unemployment. 
A)  no change in unemployment. 
B)  a cyclical increase in unemployment. 
C)  a cyclical decrease in unemployment. 
D)  a seasonal decrease in unemployment. 
E)  a seasonal increase in unemployment.

Question 12

Differences in unemployment rates among young adults in the United States, France, and Spain will likely persist because

Accepted Answer

A)  the differences in unemployment rates in these countries are caused by cyclical factors. 
B)  there is no valid economic explanation for why these differences in unemployment rates persist. 
C)  the unemployment rate among young adults is not an important macroeconomic problem. 
D)  policies to alleviate this problem involve substantial costs to workers, the firms that hire them, and the politicians who would propose these policies. 
E)  high unemployment rates among young adults is socially desirable. 
A)  the differences in unemployment rates in these countries are caused by cyclical factors. 
B)  there is no valid economic explanation for why these differences in unemployment rates persist. 
C)  the unemployment rate among young adults is not an important macroeconomic problem. 
D)  policies to alleviate this problem involve substantial costs to workers, the firms that hire them, and the politicians who would propose these policies. 
E)  high unemployment rates among young adults is socially desirable.

Question 13

Lowering the minimum wage will reduce unemployment by decreasing the amount of time it takes to search for a job.

Accepted Answer

A) True 
 B)False

Question 14

What type of policies will reduce frictional unemployment due to job search?

Accepted Answer

Policies that improve information about

Question 15

When the overall unemployment rate declines, the unemployment rate for all of the different demographic groups will tend to decline as well.

Accepted Answer

A) True 
 B)False

Question 16

The natural unemployment rate is caused by a combination of

Accepted Answer

A)  frictional and structural unemployment. 
B)  cyclical and real unemployment. 
C)  cyclical and natural unemployment. 
D)  real and natural unemployment. 
E)  real and nominal unemployment. 
A)  frictional and structural unemployment. 
B)  cyclical and real unemployment. 
C)  cyclical and natural unemployment. 
D)  real and natural unemployment. 
E)  real and nominal unemployment.

Question 17

According to the supply and demand model,

Accepted Answer

A)  higher minimum wages have no effect on unemployment for young people with low skills. 
B)  higher minimum wages will reduce unemployment among young people with low skills. 
C)  minimum wages should not differ across countries. 
D)  the higher the market wage is relative to the minimum wage, the higher the unemployment rate is among young people with low skills. 
E)  the lower the market wage is relative to the minimum wage, the higher the unemployment wage is among young people. 
A)  higher minimum wages have no effect on unemployment for young people with low skills. 
B)  higher minimum wages will reduce unemployment among young people with low skills. 
C)  minimum wages should not differ across countries. 
D)  the higher the market wage is relative to the minimum wage, the higher the unemployment rate is among young people with low skills. 
E)  the lower the market wage is relative to the minimum wage, the higher the unemployment wage is among young people.

Question 18

The natural unemployment rate has been constant over the past 40 years.

Accepted Answer

A) True 
 B)False

Question 19

If more women decide to enter the labor market,

Accepted Answer

A)  the unemployment rate will immediately decrease. 
B)  the labor force participation rate will immediately increase. 
C)  the labor force participation rate will immediately decrease. 
D)  the employment-to-population ratio will immediately increase. 
E)  the employment-to-population rate will immediately decrease. 
A)  the unemployment rate will immediately decrease. 
B)  the labor force participation rate will immediately increase. 
C)  the labor force participation rate will immediately decrease. 
D)  the employment-to-population ratio will immediately increase. 
E)  the employment-to-population rate will immediately decrease.

Question 20

Which of the following statements is true?

Accepted Answer

A)  To understand why the unemployment rate among young adults is higher in France than in Spain, some other factor such as lifestyle differences needs to be taken into consideration. 
B)  To understand why the unemployment rate among young adults is higher in Spain than in France, some other factor such as taxes on wage income needs to be taken into consideration. 
C)  To understand why the unemployment rate among young adults is higher in France than in Spain, some other factor such as taxes on wage income needs to be taken into consideration. 
D)  To understand why the unemployment rate among young adults is higher in Spain than in France, some other factor such as differences in minimum wages needs to be taken into consideration. 
E)  To understand why the unemployment rate among young adults is higher in Spain than in France, some other factor such as lifestyle differences needs to be taken into consideration. 
A)  To understand why the unemployment rate among young adults is higher in France than in Spain, some other factor such as lifestyle differences needs to be taken into consideration. 
B)  To understand why the unemployment rate among young adults is higher in Spain than in France, some other factor such as taxes on wage income needs to be taken into consideration. 
C)  To understand why the unemployment rate among young adults is higher in France than in Spain, some other factor such as taxes on wage income needs to be taken into consideration. 
D)  To understand why the unemployment rate among young adults is higher in Spain than in France, some other factor such as differences in minimum wages needs to be taken into consideration. 
E)  To understand why the unemployment rate among young adults is higher in Spain than in France, some other factor such as lifestyle differences needs to be taken into consideration.

Exam 8: Unemployment and Employment

Which of the following is true?

Of the unemployment rate, the employment-to-population ratio, and the labor force participation rate, which of the three is(are) unaffected by the discouraged worker phenomenon?

According to the job-search explanation of unemployment,

Economists agree that the natural rate of unemployment increased during the 1970s. Which of the following has been attributed as a likely reason for this phenomenon?

The unemployment rate, the labor force participation rate, and the employment-to-population ratio have the same measurement difficulties that the labor force does.

An individual who only works 11 months out of a year is classified as a part-time worker.

Discouraged workers are not part of the labor force.

Housewives are generally not counted as part of the labor force.

Usually on the first Friday of each month, the U.S. Department of Labor releases information about employment and unemployment in the previous month.

The unemployment rate in the absence of cyclical increases or decreases in the economy is known as

Students entering the labor force for the first time in June cause

Differences in unemployment rates among young adults in the United States, France, and Spain will likely persist because

Lowering the minimum wage will reduce unemployment by decreasing the amount of time it takes to search for a job.

What type of policies will reduce frictional unemployment due to job search?

When the overall unemployment rate declines, the unemployment rate for all of the different demographic groups will tend to decline as well.

The natural unemployment rate is caused by a combination of

According to the supply and demand model,

The natural unemployment rate has been constant over the past 40 years.

If more women decide to enter the labor market,

Which of the following statements is true?

The Central Idea

Observing and Explaining the Economy

The Supply and Demand Model

Subtleties of the Supply and Demand Model: Price Floors, Price Ceilings, and Elasticity

Macroeconomics: the Big Picture

Measuring the Production, Income, and Spending of Nations

The Spending Allocation Model

Productivity and Economic Growth

Money and Inflation

The Nature and Causes of Economic Fluctuations

Deriving the Formula for the Keynesian Multiplier and the Forward-Looking Consumption Model

The Economic Fluctuations Model

Using the Economic Fluctuations Model

Fiscal Policy

Monetary Policy

Capital and Financial Markets

Economic Growth and Globalization

International Trade

International Finance

Reading, Understanding, and Creating Graphs

the Miracle of Compound Growth

Present Discounted Value

Deriving the Growth Accounting Formula

Filters