Deck 7: Unemployment, Inflation, and Long-Run Growth

Question 1

For you to be considered out of the labor force, you can be

A) a full-time student.
B) a full-time retiree.
C) a full-time volunteer.
D) any of the above

Answer 1

D

Question 2

Refer to the information provided in Table 7.1 below to answer the questions that follow.
Table 7.1
Refer to Table 7.1. The labor force equals

A) 14,000 people.
B) 17,000 people.
C) 18,000 people.
D) 21,000 people.

Answer 2

B

Question 3

The number of people classified as employed is 350,000 and the number of people in the labor force is 500,000. The total number of people classified as unemployed is

A) 150,000.
B) 350,000.
C) 425,000.
D) 500,000.

Answer 3

A

Question 4

If the number of people classified as unemployed is 20,000 and the number of people classified as employed is 620,000, what is the unemployment rate?

A) 1.6%
B) 3.1%
C) 10.6%
D) 632%

Question 5

The number of people unemployed equals

A) the number of people employed minus the labor force.
B) the labor force plus the number of people employed.
C) the labor force minus the number of people employed.
D) the number of people employed divided by the labor force.

Question 6

Cheryl graduated from college a month ago and is now without work. She accepted a job that will start next month. Today, Cheryl is

A) not in the labor force.
B) in the labor force.
C) employed.
D) a discouraged worker.

Question 7

If the number of people classified as unemployed is 20,000 and the number of people classified as employed is 400,000, what is the unemployment rate?

A) 2.0%
B) 4.8%
C) 5.0%
D) 9.2%

Question 8

Refer to the information provided in Table 7.2 below to answer the questions that follow.
Table 7.2
Refer to Table 7.2. The labor force

A) equals 130 million.
B) equals 150 million.
C) equals 170 million
D) cannot be determined from this information.

Question 9

Bob is unemployed if he

A) is temporarily laid off.
B) is not looking for a job.
C) has looked for a job for two months and then quit looking.
D) A and C are correct

Question 10

Refer to the information provided in Table 7.1 below to answer the questions that follow.
Table 7.1
Refer to Table 7.1. The unemployment rate is

A) 14.3%.
B) 16.7%.
C) 17.6%.
D) 25.0%.

Question 11

If the number of people employed is 150,000 and the labor force is 170,000, the unemployment rate is

A) 2.5%.
B) 6.25%.
C) 6.55%.
D) 11.76%.

Question 12

Diane lost her job and immediately started looking for another job. As a result the

A) unemployment rate increases.
B) labor force increases.
C) labor force decreases.
D) unemployment rate remains constant.

Question 13

Refer to the information provided in Table 7.2 below to answer the questions that follow.
Table 7.2
Refer to Table 7.2. The total number of people unemployed is

A) 13 million.
B) 15 million.
C) 17 million.
D) 20 million.

Question 14

Refer to the information provided in Table 7.1 below to answer the questions that follow.
Table 7.1
Refer to Table 7.1. The employment rate is

A) 85.7%.
B) 83.3%.
C) 82.4%.
D) 75.0%.

Question 15

Refer to the information provided in Table 7.2 below to answer the questions that follow.
Table 7.2
Refer to Table 7.2. The total number of people employed is

A) 180 million.
B) 153 million.
C) 135 million.
D) 117 million.

Question 16

The unemployment rate is

A) unemployed/population × 100.
B) (employed - unemployed)/labor force × 100.
C) (labor force - employed)/labor force × 100.
D) (employed - labor force)/employed × 100.

Question 17

Refer to the information provided in Table 7.1 below to answer the questions that follow.
Table 7.1
Refer to Table 7.1. The labor-force participation rate is

A) 66.7%.
B) 75.0%.
C) 77.8%.
D) 80.9%.

Question 18

Jake retired from the police force. He started working an hour or two a day at a paid job in city's courthouse. Jake is

A) employed.
B) in the labor force.
C) unemployed.
D) not in the labor force.

Question 19

If the unemployment rate is 6.2% and the number of people employed is 200,000, the total number of people unemployed is approximately

A) 10,970 people
B) 12,400 people.
C) 13,220 people.
D) cannot be determined from this information

Question 20

The number of people classified as employed is 260,000 and the number of people classified as unemployed is 30,000. The size of the labor force

A) equals 230,000.
B) equals 260,000.
C) equals 290,000.
D) equals 320,000.

Question 21

In normal times the number of discouraged workers is approximately ________ of the labor force.

A) 0.5%
B) 1%
C) 3%
D) 4%

Question 22

When an individual quits his/her job and decides to stay at home for a while, the labor-force participation rate

A) decreases.
B) increases.
C) stays the same.
D) may increase or decrease, depending on the length of time he/she stays at home.

Question 23

When 100 people who were previously looking for jobs stop looking for jobs, the

A) unemployment rate increases.
B) size of the labor force decreases.
C) labor-force participation rate does not change.
D) unemployment rate does not change.

Question 24

If the number of unemployed equals 240,000 and the number of employed equals 300,000, the labor-force participation rate

A) is 80%.
B) is 55.6%.
C) is 24%.
D) cannot be determined from this information.

Question 25

When an economics professor quits his/her job at a university and starts looking for a better job in another university, he/she is

A) frictionally unemployed.
B) structurally unemployed.
C) cyclically unemployed.
D) naturally unemployed.

Question 26

In the United States in 2015, the highest unemployment rate was for ________ and the lowest was for ________.

A) African-American teenagers; white women
B) African-American men; white men
C) white teenagers; white men
D) African-American women; white men

Question 27

Increasing the efficiency of various employment agencies to find better matches for those looking for jobs will

A) reduce the natural rate of unemployment.
B) reduce structural unemployment.
C) reduce cyclical unemployment.
D) not affect frictional unemployment.

Question 28

Discouraged workers are

A) considered cyclically unemployed.
B) considered structurally unemployed.
C) considered frictionally unemployed.
D) not considered as part of the labor force.

Question 29

Which of the following statements is true?

A) The unemployment rate does not tell us anything about the duration of unemployment.
B) The duration of unemployment decreases during recessions.
C) The duration of unemployment increases during economic expansions.
D) The median duration of unemployment is usually greater than the average duration.

Question 30

Classifying discouraged workers as unemployed would

A) increase the unemployment rate.
B) decrease the unemployment rate.
C) not change the unemployment rate.
D) have an indeterminate impact on the unemployment rate.

Question 31

During recessions, the number of discouraged workers ________ and this ________ the unemployment rate.

A) falls; reduces
B) decreases; increases
C) increases; reduces
D) increases; increases

Question 32

If the labor force is 320,000 and the total population 16 years of age or older is 400,000, the labor-force participation rate is

A) 72%.
B) 76%.
C) 80%.
D) 88%.

Question 33

If the number of unemployed equals 30,000, the number of employed equals 60,000, and the number not in the labor force is 10,000, the labor-force participation rate

A) is 90%.
B) is 88.9%.
C) is 67%.
D) cannot be determined from this information.

Question 34

If the unemployment rate is 6.2% and the number of people employed is 200,000, the labor force is approximately

A) 210,970 people.
B) 212,400 people
C) 213,220 people.
D) cannot be determined from this information

Question 35

The labor force participation rate is the

A) total number of people who are participating in the labor force.
B) ratio of the number of employed people to the number of unemployed people.
C) ratio of the labor force to the total population 16 years old or older.
D) the number of people in the labor force minus the number of people who are unemployed.

Question 36

If the labor-force participation rate is 82% and the total population 16 years of age or older is 1 million people, the labor force is

A) 910,000 people.
B) 820,000 people.
C) 740,000 people.
D) 180,000 people.

Question 37

The Humphrey-Hawkins Act formally established a specific unemployment target for the economy of

A) 2%.
B) 4%.
C) 6%.
D) 8%.

Question 38

Mike has just graduated from college and is now looking for a job, but has not yet found one. This causes the unemployment rate to ________ and the labor-force participation rate to ________.

A) increase; decrease
B) stay the same; stay the same
C) increase; increase
D) increase; stay the same

Question 39

In June there are 30,000 people classified as unemployed and the size of the labor force is 600,000. The only change between June and July is that 10,000 of the unemployed give up looking for work. Which of the following is true?

A) In June the unemployment rate was 6% and in July the unemployment rate was 3.8%.
B) The unemployment rate in both June and July was 5%.
C) In June the unemployment rate was 5% and in July the unemployment rate was 3.39%.
D) In June the unemployment rate was 3.8% and in July the unemployment rate was 6%.

Question 40

Which of the following groups over the age of 19 had the lowest unemployment rate in the United States in 2015?

A) white males
B) African American males
C) white females
D) African American females

Question 41

During the early 1990s, companies started downsizing. One of the results of this downsizing was the permanent reduction in the number of middle management positions. This change in the way businesses operate would have

A) increased the natural rate of unemployment.
B) decreased the natural rate of unemployment.
C) not affected the natural rate of unemployment.
D) could have either increased or decreased the natural rate of unemployment.

Question 42

Structural unemployment is the

A) portion of unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certain industries.
B) unemployment that occurs during recessions and depressions.
C) portion of unemployment that is due to the normal working of the labor market.
D) unemployment that results when people become discouraged about their chances of finding a job so they stop looking for work.

Question 43

Estimates for the natural rate of unemployment in the United States range from

A) 4% to 6%.
B) 2% to 10%.
C) 1% to 5%.
D) 3% to 8%.

Question 44

An individual who cannot find a job because his or her job skills have become obsolete is an example of

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

Question 45

During the severe recession of the early 1980s, cyclical unemployment increased as the recession continued. This increase in cyclical unemployment would have

A) increased the natural rate of unemployment.
B) decreased the natural rate of unemployment.
C) had no effect on the natural rate of unemployment.
D) caused structural unemployment to decrease.

Question 46

Related to the Economics in Practice on p. 127: In the U.S. from 1955 to 1996, the labor force participation rate ________ for men and ________ for women.

A) increased; increased
B) increased; decreased
C) decreased; increased
D) decreased; decreased

Question 47

A textile firm closes a plant in Massachusetts and transfers production to a plant in South Carolina, where the firm can take advantage of cheaper labor. The plant supervisor at the Massachusetts plant is given the opportunity to move to South Carolina to become the plant supervisor at that plant. He turns down this opportunity because of family obligations. While he is searching for a new job he would be classified as

A) structurally unemployed.
B) cyclically unemployed.
C) frictionally unemployed.
D) not in the labor force because he turned down the opportunity to relocate.

Question 48

If the labor market becomes more efficient so that the unemployed are more quickly matched with jobs, then

A) the natural rate of unemployment will increase.
B) the natural rate of unemployment will decrease.
C) the natural rate of unemployment will not change.
D) the natural rate of unemployment could either increase or decrease.

Question 49

When the Fed slows the rate of growth of the money supply to slow down the economy, the unemployment type that will be directly affected is the

A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) natural rate of unemployment.

Question 50

The sum of frictional and structural unemployment is thought of as the

A) natural rate of unemployment.
B) normal rate of unemployment.
C) cyclical rate of unemployment.
D) seasonal rate of unemployment.

Question 51

An auto worker in Ohio who loses her job because the company relocated the plant to another country represents an example of

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

Question 52

The economy is in a recession and the housing market is in a slump. As a result of this, a real estate firm lays off half of its real estate agents. This is an example of

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

Question 53

The demand for refrigerators falls when the economy enters a downturn. If a refrigerator manufacturer lays off workers during an economic downturn, this would be an example of

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

Question 54

The increase in unemployment that occurs during recessions and depressions is called

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

Question 55

Related to the Economics in Practice on p. 125: Survey data suggests that during the recession of 2008-2009, the hours that those who were unemployed lost to the formal market were primarily spent on

A) job search.
B) increased education.
C) leisure activities.
D) non-market work.

Question 56

The natural rate of unemployment is generally thought of as the

A) ratio of the frictional unemployment rate to the cyclical unemployment rate.
B) sum of structural unemployment and cyclical unemployment.
C) sum of frictional unemployment and cyclical unemployment.
D) sum of frictional unemployment and structural unemployment.

Question 57

Cyclical unemployment is the

A) portion of unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certain industries.
B) unemployment that occurs during recessions and depressions.
C) portion of unemployment that is due to the normal working of the labor market.
D) unemployment that results when people become discouraged about their chances of finding a job so they stop looking for work.

Question 58

When an individual is not working and is not looking for a job because he/she lacks any marketable job skills, he/she is

A) structurally unemployed.
B) frictionally unemployed.
C) cyclically unemployed.
D) none of the above

Question 59

A man is fired from his job because he was late for work too many times. While he is searching for another job he would be classified as

A) not in the labor force because his employer had a legitimate reason for firing him.
B) structurally unemployed.
C) cyclically unemployed.
D) frictionally unemployed.

Question 60

During the Great Depression, the unemployment rate rose to about

A) 15%.
B) 25%.
C) 40%.
D) 50%.

Question 61

Refer to the information provided in Table 7.3 below to answer the questions that follow.
Table 7.3
Refer to Table 7.3. The labor-force participation rate is approximately

A) 12%.
B) 56%.
C) 80%.
D) 95%.

Question 62

Bob is not considered unemployed if he

A) is temporarily laid off.
B) is not looking for a job.
C) is not working but has looked for a job for the past two months.
D) all of the above

Question 63

Wayne did not look for another job after he lost his current job. As a result the

A) labor force immediately decreased.
B) labor force increased.
C) unemployment rate eventually decreased.
D) unemployment rate remains constant for as long as he does not look for another job.

Question 64

Refer to the information provided in Table 7.4 below to answer the questions that follow.
Table 7.4
Refer to Table 7.4. The labor force

A) equals 200 million.
B) equals 130 million.
C) equals 120 million
D) equals 110 million.

Question 65

If the number of people classified as unemployed is 5,000 and the number of people classified as employed is 45,000, what is the unemployment rate?

A) 4.5%
B) 5.0%
C) 9.5%
D) 10%

Question 66

Refer to the information provided in Table 7.4 below to answer the questions that follow.
Table 7.4
Refer to Table 7.4. The total number of people unemployed is

A) 10 million.
B) 8 million.
C) 6 million.
D) 3 million.

Question 67

Matt graduated from college six months ago and is currently without work. He accepted a job that will start in three months. Today, Matt is

A) in the labor force.
B) employed.
C) a discouraged worker.
D) not in the labor force.

Question 68

The employment rate is calculated as

A) (employed - labor force)/employed × 100.
B) (employed - unemployed)/labor force × 100.
C) unemployed/population × 100.
D) (labor force - unemployed)/labor force × 100.

Question 69

The number of people employed equals

A) the number of people unemployed minus the labor force.
B) the labor force plus the number of people unemployed.
C) the labor force minus the number of people unemployed.
D) the number of people unemployed divided by the labor force.

Question 70

If the number of people classified as unemployed is 10,000 and the number of people classified as employed is 300,000, what is the unemployment rate?

A) 3.2%
B) 3.0%
C) 2.4%
D) 1.5%

Question 71

Annabel retired from the fire department. She started volunteering two hours a day at an unpaid job in the local hospital. Annabel is

A) employed.
B) a discouraged worker.
C) unemployed.
D) not in the labor force.

Question 72

For Joanna to be considered out of the labor force, she can be

A) a full-time student.
B) temporarily laid off.
C) working only 10 hours per week.
D) self-employed.

Question 73

Related to the Economics in Practice on p. 127: If more women enter the labor force and the number of available jobs remains unchanged, the unemployment rate will, ceteris paribus,

A) increase.
B) decrease.
C) remain unchanged.
D) equal the natural rate of unemployment.

Question 74

Related to the Economics in Practice on p. 128: Compared to students who graduate college and obtain employment during an economic expansion, students who graduate during a recession often find that starting wages are ________ and wage growth is ________.

A) lower; slower
B) lower; faster
C) higher; slower
D) higher; faster

Question 75

Refer to the information provided in Table 7.3 below to answer the questions that follow.
Table 7.3
Refer to Table 7.3. The labor force equals

A) 95,000 people.
B) 100,000 people.
C) 175,000 people.
D) 180,000 people.

Question 76

Refer to the information provided in Table 7.4 below to answer the questions that follow.
Table 7.4
Refer to Table 7.4. The total number of people employed is

A) 190 million.
B) 120 million.
C) 114 million.
D) 57 million.

Question 77

The number of people classified as employed is 390,000 and the number of people classified as unemployed is 70,000. The size of the labor force

A) equals 320,000.
B) equals 390,000.
C) equals 460,000.
D) equals 480,000.

Question 78

Refer to the information provided in Table 7.3 below to answer the questions that follow.
Table 7.3
Refer to Table 7.3. The unemployment rate is

A) 2.8%.
B) 5%.
C) 5.3%.
D) 7.2%.

Question 79

The number of people classified as employed is 500,000 and the number of people in the labor force is 550,000. The total number of people classified as unemployed is

A) 11,000.
B) 50,000.
C) 500,000.
D) 550,000.

Question 80

Refer to the information provided in Table 7.3 below to answer the questions that follow.
Table 7.3
Refer to Table 7.3. The employment rate is

A) 52.8%.
B) 62.5%.
C) 95.0%.
D) 97.2%.