Deck 8: Unemployment and Employment

Question 1

Which of the following best explains the meaning of the term labor force?

A) All people 16 years of age and over who are employed
B) All people between the ages of 16 and 65
C) The population that is 16 years of age or over
D) Any individual who has a job
E) All people 16 years of age and over who are counted as employed or unemployed

Answer 1

All people 16 years of age and over who are counted as employed or unemployed

Question 2

Suppose an individual is working at home without pay. That person would be counted as

A) employed.
B) unemployed.
C) Not enough information is given.
D) not in the labor force.
E) self-employed.

Answer 2

not in the labor force.

Question 3

The official definition of a part-time worker is any individual working

A) between 1 and 10 hours per week.
B) between 1 and 34 hours per week.
C) between 1 and 25 hours per week.
D) between 1 and 20 hours per week.
E) between 1 and 40 hours per week.

Answer 3

between 1 and 34 hours per week.

Question 4

To be counted as unemployed a person must

A) be looking for work for at least two weeks.
B) have had a job sometime in the past.
C) be looking for work for at least a week.
D) be actively looking for work.
E) be a discouraged worker.

Question 5

The Current Population Survey is a survey of

A) 1 million households in the United States.
B) all households in the United States.
C) unemployed individuals.
D) 60,000 households in the United States.
E) the whole U.S. population.

Question 6

To be counted as unemployed a person must be

A) All of these
B) actively looking for work.
C) 14 or older.
D) working less than five hours per week.
E) a discouraged worker.

Question 7

Which of the following groups will likely have an average unemployment rate that will be significantly lower than the average unemployment rate of the general population?

A) College graduates
B) Teenagers in working age
C) Hispanic teenagers
D) All of the above
E) None of the above

Question 8

Which of the following best describes a group of people who, according to the U.S. Current Population Survey, are more likely to work part-time?

A) Accountants
B) Women with young children
C) University professors
D) Border Patrol agents
E) All of these

Question 9

To be counted as unemployed a person must be

A) actively looking for work.
B) All of these
C) working less than one hour per week.
D) 16 or older.
E) in the labor force.

Question 10

Which of the following statements is true?

A) During the 2008-09 recession, job losses in the United States were minimal and the unemployment rate fell.
B) During the 2008-09 recession, job losses in the United States were minimal, but the unemployment rate rose.
C) During the 2008-09 recession, job losses in the United States were large, but the unemployment rate fell.
D) During the 2008-09 recession, job losses in the United States were large and the unemployment rate rose.
E) By the end of the 2008-09 recession, payroll employment increased in the United States.

Question 11

A 21-year-old student looks for a job in the fall, and when she cannot find a suitable job after a few weeks, she gives up her search. This student is

A) in the labor force because she is over age 16.
B) a disgruntled worker.
C) not in the working-age population.
D) counted as unemployed.
E) neither employed nor unemployed.

Question 12

Which of the following statements is false?

A) Unemployment rates vary across groups of individuals of different gender, age, race, and education.
B) Unemployment rates vary across countries.
C) The United States in a recession may have a lower unemployment rate than other economies that are booming.
D) At any given month the unemployment rate is the same in every country.
E) The United States in a recession may have a higher unemployment rate than other economies that are booming.

Question 13

Joe works at a local newspaper 20 hours a week as a columnist and spends 20 hours a week writing his first novel, which he hopes to get published someday. Joe is

A) employed part-time.
B) not in the labor force.
C) employed full-time.
D) a discouraged worker.
E) unemployed.

Question 14

The most difficult part of measuring the amount of unemployment is

A) defining and measuring the working-age population.
B) defining and measuring who is employed.
C) defining and measuring who is in the labor force.
D) deciding who to include in the Current Population Survey.
E) None of these

Question 15

At the end of 2010, the working-age population in the United States was approximately

A) 320 million people.
B) 140 million people.
C) 239 million people.
D) 185 million people.
E) 65 million people.

Question 16

Which of the following statements is true?

A) The fraction of women working part-time is greater than men, but men and women are just as likely to work part-time for reasons of personal choice.
B) The fraction of men working part-time is greater than women, and women give personal choice as a reason for working part-time more frequently than men.
C) The fraction of women working part-time is greater than men, and women give personal choice as a reason for working part-time more frequently than men.
D) The fraction of men working part-time is greater than women, and men give personal choice as a reason for working part-time more frequently than women.
E) The fraction of women working part-time is greater than men, but men give personal choice as a reason for working part-time more frequently than women.

Question 17

According to the Current Population Survey, if a person is not counted as employed, then he or she is unemployed.

Question 18

The Current Population Survey is conducted by the

A) Council of Economic Advisers.
B) Federal Reserve Board.
C) U.S. Census Bureau.
D) U.S. Department of Commerce.
E) Department of Labor.

Question 19

Which of the following examples best describes a discouraged worker?

A) A 25-year-old who, after not being able to find a legitimate job after searching for two years, makes his living selling drugs
B) An incarcerated 17-year-old
C) A college student who does not have time to work
D) A 65-year-old individual who moves to Florida after retirement
E) A 55-year-old who, after being laid off from a full-time job, is only able to find a job employing her for 15 hours a week

Question 20

According to the Current Population Survey, which of the following is the best example of an unemployed person?

A) Any person not working or not working as many hours as he or she would prefer
B) Any person without a job while looking for work
C) A person without a job
D) Any person looking for work
E) A person who decides to leave the labor force

Question 21

If the working-age population is 100 million, the labor force is 75 million, and the number employed is 60 million, what is the unemployment rate?

A) 20 percent
B) 80 percent
C) 40 percent
D) 60 percent
E) 75 percent

Question 22

The average number of hours worked per week has increased as a result of more people working part-time.

Question 23

The average number of hours of work per worker each week is 40 hours.

Question 24

Which of the following statements is the only one that could possibly be true about the figure below?

A) Series X is the labor force participation rate, and series Y is the employment-to-population ratio.
B) Series X is the employment-to-population ratio, and series Y is the labor force participation rate.
C) Series X is the labor force participation rate, and series Y is the unemployment rate.
D) Series X is the employment-to-population ratio, and series Y is the unemployment rate.
E) Series X is the unemployment rate, and series Y is the labor force participation rate.

Question 25

A student who is not looking for work will be considered part of the labor force but not unemployed.

Question 26

There has been a significant increase in the participation of women in the labor force in the decade between 1996 and 2010.

Question 27

Which indicators of conditions in the labor market are sensitive to measurement errors of the labor force?

A) The unemployment rate and the labor force participation rate
B) None of these
C) The employment-to-population ratio and the labor force participation rate
D) The employment-to-population ratio and the unemployment rate
E) The employment-to-population ratio, the unemployment rate, and the labor force participation rate

Question 28

If more women decide to enter the labor market,

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 29

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

Question 30

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?

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

Question 31

Which of the following is true?

A) The employment-to-population ratio has decreased over the past 30 years.
B) The labor force participation rate has decreased over the past 30 years.
C) The employment-to-population ratio has increased over the past 30 years.
D) The labor force participation rate, the unemployment rate, and the employment-to-population ratio have all increased over the past 30 years.
E) The unemployment rate has increased over the past 30 years.

Question 32

The rate of female participation in the labor force has multiplied 10-fold since the 1950s.

Question 33

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

Question 34

During a recession, people may drop out of the labor force because they are unable to find a job. All else being equal, this causes

A) no change in the unemployment rate.
B) the unemployment rate to increase.
C) the unemployment rate to decrease.
D) a decrease in the working-age population.
E) an increase in the employment-to-population ratio.

Question 35

Defining and measuring the labor force is the most difficult part of measuring unemployment.

Question 36

Discouraged workers are not part of the labor force.

Question 37

Roughly, the percentage of U.S. workers that is employed part-time is about 1 percent.

Question 38

Which of the following statements about the U.S. employment statistics is not true?

A) Since the 1950s, a growing number of women are part of the labor force.
B) In 1956, about 37 percent of women were part of the labor force.
C) In 2010, almost 60 percent of women were part of the labor force.
D) There was a significant increase in the participation of women in the labor force in the decade between 1996 and 2010.
E) All of these are true facts.

Question 39

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

Question 40

The employment-to-population ratio in the United States has increased in the 30 years from about 57 percent in 1970 to over 64 percent in 2000.

Question 41

The growth rate of aggregate hours in the United States is

A) slowing because the working-age population is growing more slowly.
B) slowing because people are working fewer hours.
C) slowing because the working-age population is growing more rapidly.
D) increasing because people are working more hours.
E) increasing because the working-age population is growing more rapidly.

Question 42

If both hours worked per employee and the number of employed workers stay constant while the working-age population increases,

A) the unemployment rate will decrease.
B) aggregate hours will decline.
C) the unemployment rate will increase.
D) aggregate hours will not change.
E) aggregate hours will increase.

Question 43

Which of the following would cause aggregate hours to increase?

A) An increase in the employment-to-population ratio
B) A decrease in the employment-to-population ratio
C) A decrease in the number of hours worked per employed worker
D) A decrease in the working-age population
E) An increase in the number of part-time workers

Question 44

If people have more children, the unemployment rate will increase when the children enter the work force.

Question 45

If the working-age population increases while the employed labor force stays constant, then aggregate hours are most likely to

A) decline.
B) stay constant.
C) increase.
D) Not enough information is given.

Question 46

Exhibit 20-1
According to the data in Exhibit 20-1, if economic conditions change such that the unemployment rate declines to 4.5 percent, what is the new value of aggregate hours?

A) 211 billion hours per year
B) 205 billion hours per year
C) Aggregate hours will be unaffected.
D) 241 billion hours per year
E) 220 billion hours per year

Question 47

If the number of discouraged workers increases, the unemployment rate will decrease.

Question 48

The employed labor force is a good measure of the labor input to production.

Question 49

Which of the following is the best measure of labor input?

A) The employment-to-population ratio
B) The unemployment rate
C) The labor force participation rate
D) The employed labor force
E) Aggregate hours

Question 50

The main reason for the current decline in the growth rate of aggregate hours is that the growth rate of the working-age population is declining.

Question 51

Exhibit 20-1
According to the data in Exhibit 20-1, aggregate hours equal

A) 252 billion.
B) 351 billion.
C) 234 million.
D) 252 million.
E) 234 billion.

Question 52

The growth of aggregate labor hours in the U.S. is slowing down, increasing by only 1.25 percent in the last decade.

Question 53

If people have more children, the labor force participation rate will increase when the children enter the work force.

Question 54

If the number of people working part-time increases, aggregate hours will fall.

Question 55

Exhibit 20-1
According to the data in Exhibit 20-1, the employment-to-population ratio is

A) 67 percent.
B) 62 percent.
C) 72 percent.
D) 93 percent.
E) 51 percent.

Question 56

Exhibit 20-1
According to the data in Exhibit 20-1, the unemployment rate is

A) 2.9 percent.
B) 33 percent.
C) 7.1 percent.
D) 3.3 percent.
E) 29 percent.

Question 57

An increase in the employment-to-population ratio would

A) cause the labor force participation rate to increase.
B) cause aggregate hours to decrease.
C) cause aggregate hours to increase.
D) cause the labor force participation rate to decrease.
E) have no effect on aggregate hours.

Question 58

The rate of growth of aggregate hours was higher in the 1970s and 1980s than it was in the 1990s.

Question 59

The employment-to-population ratio is the highest it has been in U.S. history.

Question 60

The growth of aggregate labor hours in the United States is slowing down. What has been cited as one of the main reasons explaining this slowdown?

A) Technological changes
B) A slowdown in the growth of the working-age population itself
C) Globalization trends
D) All of the above
E) None of the above

Question 61

Frictional unemployment occurs because

A) it takes time to find a job.
B) people have insufficient skills.
C) of economic booms.
D) of recessions.
E) of inflation.

Question 62

Which of the following is not in agreement with the definition of frictional unemployment?

A) It occurs when new workers enter the labor force and must look for work.
B) It can also occur in the time when workers change jobs.
C) It is most commonly short-lived.
D) It appears because of the natural friction between bosses and their employees.
E) All of these are part of the definition of frictional unemployment.

Question 63

The type of unemployment that occurs because technological changes make some jobs obsolete is known as

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

Question 64

The natural unemployment rate

A) can be precisely estimated at any given time.
B) declined in the 1970s.
C) declined in the 1990s.
D) has remained constant since the 1950s.
E) is increasing as the labor force ages.

Question 65

The natural rate of unemployment is equal to zero when the economy is at full capacity.

Question 66

The natural unemployment rate is the unemployment rate

A) when the economy is in a recession.
B) when real and potential GDP are equal.
C) when the economy is in a boom.
D) related to the business cycle.
E) when real and nominal GDP are equal.

Question 67

Cyclical unemployment can best be described as the

A) increase in unemployment when the economy is in a boom.
B) increase in unemployment when the economy is in a recession.
C) amount of unemployment when real and potential GDP are equal.
D) increase in unemployment above the natural rate during and in the aftermath of recessions.
E) amount of unemployment when real and nominal GDP are equal.

Question 68

The natural unemployment rate is another name for the average rate of unemployment in the economy.

Question 69

Structural unemployment occurs because

A) of inflation.
B) people have insufficient skills.
C) of recessions.
D) it takes time to find a job.
E) of economic booms.

Question 70

Cyclical unemployment refers to that kind of unemployment that is related to the short-term cyclical fluctuations of the economy.

Question 71

Which of the following might cause the natural unemployment rate to increase?

A) Unemployment insurance being abolished
B) A recession in the economy
C) More young people entering the work force
D) An increase in migration to other countries
E) People having fewer children

Question 72

Frictional unemployment is defined as the increase in the unemployment rate during a recession.

Question 73

Structural unemployment is defined as unemployment that is more long term in nature.

Question 74

The term natural in the phrase natural unemployment rate implies

A) that the unemployment rate is as low as it can be when it is at the natural rate.
B) that unemployment is at an ideal rate when it is at the natural rate.
C) the unemployment rate that prevails when real GDP equals potential GDP.
D) that the unemployment rate is at the highest rate it can be when it is at the natural rate.
E) that the unemployment rate is at the rate it would be at if there were no minimum wage laws.

Question 75

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?

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 76

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

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 77

If the number of people working part-time increases and there is no change in the number of people employed, then aggregate hours will fall.

Question 78

Which of the following statements about the natural rate of unemployment is true?

A) The natural rate of unemployment declined during the 1970s.
B) An aging labor force causes the natural rate of unemployment to decline.
C) Economists are able to precisely calculate the natural rate of unemployment.
D) The natural rate of unemployment has remained constant over the past 30 years.
E) The term natural in natural rate of unemployment is meant to imply that this is the unemployment rate that the economy should always try to strive for.

Question 79

Which of the following might cause the natural unemployment rate to decrease?

A) More young people entering the work force
B) An increase in unemployment insurance payments
C) A decrease in the number of people migrating to other countries
D) Less young people entering the work force
E) People having more children

Question 80

The natural unemployment rate is caused by a combination of

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.