Deck 7: Unemployment

Question 1

Structural unemployment is:

A) unemployment caused by time delays in matching available jobs with workers.
B) unemployment caused by changes in the industrial makeup of an economy.
C) unemployment caused by economic downturns.
D) when a worker stop looking for a job because he feels no job is available for him.
E) not one of the three types of unemployment.

Answer 1

unemployment caused by changes in the industrial makeup of an economy.

Question 2

Between 1979 and 2012, service industries employment in the United States has:

A) stayed constant.
B) fallen by almost 50%.
C) risen by almost 72%.
D) risen by almost 90%.
E) fallen by only 10%.

Answer 2

risen by almost 72%.

Question 3

Some jobs in the economy are no longer needed after an advancement in technology. A person who loses his job this way would be considered:

A) frictionally unemployed.
B) cyclically unemployed.
C) structurally unemployed.
D) overemployed.
E) a discouraged worker

Answer 3

structurally unemployed.

Question 4

The government has decided to give governmental grants to community colleges that offer job training for individuals who have recently been laid off due to their outmoded skills. The government is trying to reduce the level of:

A) structural unemployment.
B) frictional unemployment.
C) cyclical unemployment.
D) real gross domestic product (GDP).
E) household consumption.

Question 5

Workers who lose their job because of market innovations are considered:

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

Question 6

The main statistic that is used to monitor unemployment in the economy is:

A) real gross domestic product (GDP).
B) the unemployment rate.
C) the unemployed-employed ratio.
D) real GDP per capita.
E) discouraged workers.

Question 7

All three types of unemployment:

A) are bad for the economy.
B) create a shortage of workers in the workforce.
C) are good for the economy.
D) are difficult on households.
E) are always the same level.

Question 8

The government can assist in reducing the level of structural unemployment by:

A) providing unemployment insurance.
B) establishing government regulations on firing employees.
C) taxing employers who hire low-skilled workers.
D) providing job-training programs.
E) incentivizing companies to update their current technology.

Question 9

Which of the following two types of unemployment occur even when the economy is healthy and growing?

A) frictional and structural
B) cyclical and frictional
C) structural and cyclical
D) frictional and practical
E) structural and practical

Question 10

Structural, frictional, and cyclical are all types of:

A) jobs.
B) price levels.
C) firm structures.
D) unemployment.
E) economic models.

Question 11

Jamal works in a factory in Lake Zurich, Illinois, assembling toy trains. The factory owner updates the current equipment and installs new robots that can do Jamal's job. As a result, Jamal is laid off and is now unemployed. Jamal would be considered:

A) structurally unemployed.
B) cyclically unemployed.
C) frictionally unemployed.
D) overemployed.
E) a discouraged worker.

Question 12

Official unemployment is identified as when:

A) a worker who is not currently employed is searching for a job unsuccessfully.
B) a worker who is not currently employed stops searching for a job.
C) a worker leaves her job to attend school full-time.
D) a worker retires from her job.
E) a worker who is not currently employed stops searching for a job because she feels there is no job available for her.

Question 13

Between 1960 and 2012, the average unemployment rate in the United States was about:

A) 4%.
B) 6%.
C) 0%.
D) 8%.
E) 9%.

Question 14

Which of the following lists the three types of unemployment?

A) frictional, structural, and practical
B) practical, structural, and cyclical
C) frictional, unavailable, and structural
D) cyclical, practical, and unavailable
E) frictional, structural, and cyclical

Question 15

Which of the following statements about structural unemployment is true?

A) Structural unemployment can be eliminated through government intervention.
B) Structural unemployment is equal to zero when the economy is in an expansion.
C) Structural unemployment cannot be eliminated.
D) Structural unemployment is not a burden on household incomes.
E) Structural unemployment is unhealthy for the long-run growth of an economy.

Question 16

Which of the following is an example of structural unemployment?

A) Raymond loses his job as a steel worker because the economy is in a downturn.
B) Chad graduates with his master's degree in economics and is searching for an analyst job in Oklahoma.
C) Edith has decided to retire after 35 years of working at the state prison.
D) Cameron quits his job because he wants to become an astronaut.
E) Jasmine loses her job as a newspaper editor because the publication has gone digital.

Question 17

Which of the following people would be officially considered unemployed?

A) Mitchell, who is a full-time student working part-time at the bookstore
B) Janice, who is actively seeking a full-time job while currently working at a part-time job
C) Jade, who has stopped looking for a job because she feels there are no jobs available for her
D) Jenna, who just graduated college and is searching for a job that fits her graphic-design skills
E) Ralph, who is a stay-at-home father and is not currently looking for a job

Question 18

Between 1979 and 2012, manufacturing employment in the United States has:

A) stayed constant.
B) fallen by almost 50%.
C) risen by almost 50%.
D) risen by almost 90%.
E) fallen by only 10%.

Question 19

Workers who lose their jobs because the skill set they possess is no longer required in the economy are considered to be:

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

Question 20

One misconception that people often have about unemployment is that:

A) unemployment is a macroeconomic topic.
B) unemployment is important to the economy.
C) as a nation, we should aim for zero unemployment.
D) the unemployment rate does not tell the whole story about the employment situation.
E) discouraged workers are not included in the official unemployment rate.

Question 21

Government policies such as unemployment compensation and government regulations related to hiring and firing employees result in:

A) lower frictional unemployment.
B) lower structural unemployment.
C) higher frictional unemployment.
D) lower cyclical unemployment.
E) higher structural unemployment.

Question 22

An economic downturn can lead to mainly which type of unemployment?

A) cyclical unemployment
B) frictional unemployment
C) seasonal unemployment
D) structural unemployment
E) practical unemployment

Question 23

Frictional unemployment is:

A) unemployment caused by time delays in matching available jobs and workers.
B) unemployment caused by changes in the industrial makeup of an economy.
C) unemployment caused by economic downturns.
D) when a worker stops looking for a job because she feels no job is available for her.
E) not one of the three types of unemployment.

Question 24

One argument against unemployment insurance is that:

A) unemployment insurance limits the effects of a recession.
B) unemployment insurance is only available during recessions.
C) unemployment insurance creates an indirect incentive that can make it less attractive for workers to stay unemployed.
D) unemployment insurance can be extended by the government during times of recession.
E) unemployment insurance creates an indirect incentive that can make it more attractive for workers to stay unemployed.

Question 25

JTKB is an accounting firm in South Orange County, Florida. Company policy is that whenever JTKB decides to open up a new accounting position, the hiring manager must conduct at least five interviews over a two-week span. Because of this process, JTKB is increasing ____________ in South Orange County, Florida.

A) the number of discouraged workers
B) structural unemployment
C) cyclical unemployment
D) frictional unemployment
E) labor force participation

Question 26

Frictional unemployment is present in an economy because:

A) workers often need to update their skills.
B) workers take time to decide which job is best for them.
C) firms often lay off workers due to economic recession.
D) the unemployment rate is too low.
E) there are often changes in the industrial makeup of an economy.

Question 27

Which of the following is an example of frictional unemployment?

A) Raymond loses his job as a steel worker because the economy is in a downturn.
B) Chad graduates with his master's degree in economics and is searching for an analyst job.
C) Edith has decided to retire after 35 years of working at the state prison.
D) Cameron quits his job at the circus to volunteer for the Red Cross.
E) Jasmine loses her job as a newspaper editor because the publication has gone digital.

Question 28

In November of 2009, the United States was in a deep recession. To help keep the economy afloat, the government extended the period of time one could receive unemployment insurance to 99 weeks. This policy had an unintended consequence because:

A) workers searched for jobs for longer, which reduced the unemployment rate.
B) many workers quit their jobs so they could receive unemployment insurance.
C) workers spent more time searching for the perfect job, which increased frictional unemployment.
D) employers were more hesitant to fire workers, which reduced the unemployment rate.
E) employers were more hesitant to fire workers, which increased the unemployment rate.

Question 29

The Internet has enabled workers and companies to find each other more quickly and to make better matches with substantially lower costs. The result is:

A) lower frictional unemployment.
B) lower structural unemployment.
C) higher frictional unemployment.
D) lower cyclical unemployment.
E) higher structural unemployment.

Question 30

When it is difficult to hire employees, firms take ____________ to hire, which increases ____________ unemployment.

A) less time; frictional
B) less time; structural
C) longer; frictional
D) longer; cyclical
E) longer; structural

Question 31

Anything that lengthens the job search process:

A) increases structural unemployment.
B) increases frictional unemployment.
C) decreases frictional unemployment.
D) increases cyclical unemployment.
E) decreases structural unemployment.

Question 32

During normal economic times, unemployment in France and Germany tends to be ____________ than in the United States mainly because of ____________.

A) higher; labor market regulations
B) lower; labor market regulations
C) higher; exchange rates
D) longer; exchange rates
E) higher; cyclical unemployment

Question 33

Some individuals are unemployed because it takes time for them to find a job that fits their skill set. These individuals would be considered to be:

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

Question 34

Unemployment caused by delays in matching available jobs and workers is called:

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

Question 35

Brian Murphy is a political consultant for a candidate in Massachusetts. Mr. Murphy's candidate is defeated in the November election, and as a result, Mr. Murphy finds himself unemployed. Mr. Murphy's unemployment is classified as:

A) discouraged unemployment.
B) structural unemployment.
C) frictional unemployment.
D) cyclical unemployment.
E) long-term unemployment.

Question 36

Cyclical unemployment is:

A) unemployment caused by time delays in matching available jobs and workers.
B) unemployment caused by changes in the industrial makeup of an economy.
C) unemployment caused by economic downturns.
D) when workers stop looking for a job because they feel no job is available for them.
E) not one of the three types of unemployment.

Question 37

The invention of the Internet has reduced ____________ unemployment because it allows for workers and employers to find each other more quickly.

A) structural
B) cyclical
C) discouraged
D) frictional
E) seasonal

Question 38

The government can assist in reducing the level of structural unemployment by:

A) providing unemployment benefits.
B) establishing government regulations on hiring employees.
C) subsidizing the relocation of workers who lose their jobs.
D) instituting a minimum-wage law.
E) incentivizing companies to move their production overseas.

Question 39

A government program that reduces the hardship of being out of work by guaranteeing that unemployed workers receive a percentage of their former income while they are unemployed is referred to as:

A) employment insurance.
B) unemployment insurance.
C) natural unemployment.
D) frictional unemployment.
E) structural unemployment.

Question 40

Nina has a part-time job as she finishes her degree in fashion design. After obtaining her degree she decides to quit her part-time job to search for a job that better fits her now-improved skill set. Nina has a few interviews, but it is taking time to find the job that suits her best. Nina would be considered:

A) structurally unemployed.
B) cyclically unemployed.
C) frictionally unemployed.
D) overemployed.
E) a discouraged worker.

Question 41

When actual unemployment is less than its natural rate:

A) the economy is expanding beyond its long-run capabilities.
B) the economy is producing within its long-run capabilities.
C) the numbers must be wrong because the actual unemployment rate can never be less than the natural rate.
D) the economy is in a recession.
E) the economy must be experiencing high inflation.

Question 42

When actual unemployment is less than its natural rate:

A) the economy is in a recession.
B) the economy is producing within its long-run capabilities.
C) the numbers must be wrong because the actual unemployment rate can never be less than the natural rate.
D) the economy is in an expansion.
E) the economy must be experiencing high inflation.

Question 43

Some individuals are unemployed because they are laid off from their job when the economy is sluggish. These individuals would be considered:

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

Question 44

Zero unemployment:

A) is only possible in recessions.
B) is not possible.
C) is only possible in expansions.
D) is the goal of macroeconomic policymakers.
E) is ideal for economic growth.

Question 45

The natural rate of unemployment is:

A) the average unemployment rate during a recession.
B) equal to zero percent.
C) constant over time.
D) the typical rate of unemployment when the economy is growing normally.
E) equal to the rate of cyclical unemployment.

Question 46

Daniel, Steven, and Chris work as engineers in Connecticut. The demand for engineers starts to decline as their company's profits start to decrease during a recession. As a result, Daniel and Steven are laid off from their jobs. Daniel and Steven would be classified as:

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

Question 47

During a recession, fewer individuals fly across the country for vacations. As a result, many pilots and flight attendants lose their jobs. These individuals would be classified as:

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

Question 48

Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment?

A) Demand for products starts to decrease, so firms keep their factories open for additional hours of production to make up the difference.
B) Demand for products is so high that firms keep their factories open for additional hours of production and pay their workers overtime.
C) Demand for products is so high that firms raise their prices to take advantage of extra profits.
D) The economy enters a recession so firms start to produce more to help boost the economy.
E) The government decreases unemployment benefits.

Question 49

During healthy economic periods:

A) only frictional and structural unemployment exist.
B) only cyclical unemployment exists.
C) only frictional unemployment exists.
D) only structural unemployment exists.
E) only structural and cyclical unemployment exist.

Question 50

When actual unemployment is less than its natural rate:

A) the economy is producing below its long-run capabilities.
B) the economy is producing within its long-run capabilities.
C) resources are employed at levels that are not sustainable in the long run.
D) resources are employed at levels that are sustainable in the long run.
E) output is less than full-employment output.

Question 51

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

A) The actual unemployment rate can never be above the natural rate.
B) The actual unemployment rate can never be at the natural rate.
C) The natural rate of unemployment consists of both cyclical and structural unemployment.
D) Sometimes the actual unemployment rate is below the natural rate.
E) The natural rate of unemployment consists of both cyclical and frictional unemployment.

Question 52

When the unemployment rate is equal to its natural rate-that is, no cyclical unemployment exists-the output level produced in the economy is:

A) always increasing.
B) at full-employment output.
C) below full-employment output.
D) above full-employment output.
E) always decreasing.

Question 53

Natural unemployment is:

A) the average of frictional, structural, and cyclical unemployment.
B) the sum of frictional, structural, and cyclical unemployment.
C) the sum of frictional and cyclical unemployment.
D) the sum of structural and cyclical unemployment.
E) the sum of structural and frictional unemployment.

Question 54

What are the two types of unemployment that are consistent with a dynamic, growing economy?

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

Question 55

The 2007-2009 recession lasted for:

A) 12 months.
B) 19 months.
C) 36 months.
D) 6 months.
E) 24 months.

Question 56

During healthy economic periods, cyclical unemployment:

A) rises.
B) will equal structural unemployment.
C) falls toward zero.
D) will equal frictional unemployment.
E) will equal the natural rate of unemployment.

Question 57

Economists refer to full-employment output as:

A) gross domestic product (GDP) per capita.
B) natural GDP.
C) real GDP.
D) nominal GDP.
E) potential GDP.

Question 58

If the economy is expanding beyond its long-run capabilities, we know that:

A) we are in a depression.
B) we are in a recession.
C) actual unemployment is above its natural rate.
D) actual unemployment is at its natural rate.
E) actual unemployment is less than its natural rate.

Question 59

An unemployment rate that is above the natural rate indicates ____________, and we say that the economy is producing at ____________.

A) cyclical unemployment; more than the full-employment output level
B) cyclical unemployment; the full-employment output level
C) cyclical unemployment; less than the full-employment output level
D) frictional unemployment; more than the full-employment output level
E) frictional unemployment; the full-employment output level

Question 60

The root cause of cyclical unemployment is:

A) unemployment insurance.
B) labor market regulations.
C) delays in matching available workers with open jobs.
D) downturns in the business cycle.
E) changes in the industrial makeup of the economy.

Question 61

If the unemployment rate is 5.8% and the number of unemployed persons is 15 million, the number of people who are employed is approximately:

A) 258 million.
B) 243 million.
C) 87 million.
D) 870 million.
E) 2.6 million.

Question 62

If a jobless person has not sought a job in ____________ weeks, that person is not counted in the unemployment statistics.

A) 6
B) 4
C) 5
D) 1
E) 52

Question 63

Use the following table to answer the next questions:
According to the table, the relevant population is equal to:

A) 95 million.
B) 161 million.
C) 274 million.
D) 84 million.
E) 179 million.

Question 64

Use the following table to answer the next questions:
According to the table, the number of employed in this economy is equal to:

A) 95 million.
B) 161 million.
C) 84 million.
D) 18 million.
E) 179 million.

Question 65

The unemployment rate is:

A) the percentage of the population that is unemployed.
B) the percentage of the adult population that is unemployed.
C) the percentage of the labor force that is unemployed.
D) the percentage of the adult population that is in the labor force.
E) the percentage of the labor force that is employed.

Question 66

Individuals who are not working but are willing to work and who have looked for a job in the past 12 months but have not sought employment in the past 4 weeks are defined as:

A) unemployed.
B) employed.
C) unhappy workers.
D) discouraged workers.
E) retired.

Question 67

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

A) Since 1960 the average unemployment rate in the United States has been about 2%.
B) Since 1960 the average unemployment rate in the United States has been about 10%.
C) Since 1960 the average unemployment rate in the United States has been about 6%.
D) The unemployment rate in the United States has never fallen below 6%.
E) The unemployment rate in the United States is always above 5%.

Question 68

Use the following table to answer the next questions:
According to the table, the labor force participation rate in this economy is equal to:

A) 18.9%.
B) 36.9%.
C) 65.3%.
D) 10.1%.
E) 8.5%.

Question 69

Which of the following equations represents the unemployment rate?

A) (number of unemployed √ labor force) * 100
B) (unemployed + employed)
C) (number of employed √ labor force) * 100
D) (number of unemployed √ relevant population) * 100
E) (labor force √ relevant population) * 100

Question 70

Use the following table to answer the next questions:
According to the table, the unemployment rate in this economy is equal to:

A) 18.9%.
B) 36.9%.
C) 63.4%.
D) 10.1%.
E) 8.5%.

Question 71

Use the following table to answer the next questions:
According to the table, the unemployment rate in this economy is equal to:

A) 4.9%.
B) 92.2%.
C) 63.4%.
D) 7.8%.
E) 8.5%.

Question 72

A member of the labor force is defined as:

A) someone who is employed.
B) someone who is above the age of 16.
C) someone who is employed on a part-time basis.
D) someone already employed or actively seeking work.
E) someone already employed on a full-time basis.

Question 73

Use the following table to answer the next questions:
According to the table, the employment rate in this economy is equal to:

A) 4.9%.
B) 92.2%.
C) 63.4%.
D) 7.8%.
E) 8.5%.

Question 74

Discouraged workers are defined as:

A) individuals who are not working but are willing to work and who have looked for a job in the past 12 months but have not sought employment in the past 4 weeks.
B) individuals who are not working and have looked for a job in the past 4 weeks.
C) individuals who are working part-time but would rather be working full-time.
D) individuals who are working full-time for wages lower than they want to work for.
E) individuals who are not working because of a disability or childcare issues.

Question 75

Which of the following statements about unemployment is true?

A) To be officially unemployed, a person has to be in the labor force.
B) A person who is not working is officially unemployed.
C) A person who is working part-time but would like to be working full-time is considered to be unemployed.
D) A person who is retired and not looking for a job is still considered unemployed.
E) A person who is a full-time student and not seeking employment is still considered unemployed.

Question 76

If the unemployment rate is 5.8% and the number of unemployed persons is 15 million, the labor force is approximately:

A) 258 million.
B) 25.8 million.
C) 87 million.
D) 870 million.
E) 2.6 million.

Question 77

Which of the following individuals would NOT be considered part of the labor force?

A) Jim, who is a full-time student working part-time
B) Lisa, who is working part-time but wants to be working full-time
C) Kimberly, who has retired from the military and now works at the post office
D) Charles, who is in the marines and currently deployed to Iraq
E) Thomas, who is unemployed but has given up searching for a job because he believes there are no jobs available for him

Question 78

During periods of recession:

A) the unemployment rate declines.
B) the unemployment rate rises.
C) household income rises.
D) output rises.
E) real gross domestic product (GDP) rises.

Question 79

Underemployed workers are:

A) individuals who are not working but are willing to work and who have looked for a job in the past 12 months but have not sought employment in the past 4 weeks.
B) individuals who are not working and have looked for a job in the past 4 weeks.
C) individuals who are working part-time but would prefer to be working full-time.
D) individuals who are working full-time for wages lower than they want to work for.
E) individuals who are not working because of a disability or childcare issues.

Question 80

Use the following table to answer the next questions:
According to the table, the labor force participation rate in this economy is equal to:

A) 4.9%.
B) 92.2%.
C) 63.4%.
D) 7.8%.
E) 8.5%.