Deck 33: Jobs and Unemployment

Question 1

Structural unemployment is caused by:

A)a general downturn in the economy.
B)people quitting a job just long enough to look for and find another one.
C)people over 65 who don't really want to work.
D)people losing a job when their skills become obsolete due to technological innovations.

Answer 1

people losing a job when their skills become obsolete due to technological innovations.

Question 2

Workers at a car-manufacturing plant are let go because automated machinery has been installed that requires fewer employees to operate.What type of unemployment describes the workers' situation?

A)Cyclical unemployment
B)Full unemployment
C)Structural unemployment
D)Frictional unemployment

Answer 2

Structural unemployment

Question 3

Okun's rule of thumb states that a:

A)2 percentage point rise in the unemployment rate will tend to be associated with a 1 percent fall in output from its trend and vice versa.
B)2 percentage point rise in the unemployment rate will tend to be associated with a 1 percent rise in output from its trend and vice versa.
C)1 percentage point rise in the unemployment rate will tend to be associated with a 2 percent fall in output from its trend and vice versa.
D)1 percentage point rise in the unemployment rate will tend to be associated with a 2 percent rise in output from its trend and vice versa.

Answer 3

1 percentage point rise in the unemployment rate will tend to be associated with a 2 percent fall in output from its trend and vice versa.

Question 4

Someone who believes in the social responsibility framework believes that the standard measure of unemployment underestimates the level of unemployment.

Question 5

Which of the following groups tends to have the highest unemployment rates?

A)Blacks
B)Whites
C)Asians
D)Latinos

Question 6

In today's globalized economy, a U.S.worker's reservation wage tends to be lower than the reservation wage of many workers in developing countries.

Question 7

News Story: Workers at a car-manufacturing plant in Flint, Michigan are laid off because the economy is weak and GM cars are not selling well.GM isn't sure when the plant will reopen.What type of unemployment describes the workers' situation?

A)Cyclical unemployment
B)Funemployment
C)Structural unemployment
D)Frictional unemployment

Question 8

Cyclical unemployment is caused by fluctuations in economic activity.

Question 9

Someone who believes in the individual responsibility framework believes that the standard measure of unemployment underestimates the level of unemployment.

Question 10

Jamaal lost his job when a mechanical device replaced people with his skills.If Jamaal's skills are non-transferable, he would be considered to be structurally unemployed.

Question 11

Cyclical unemployment results from:

A)fluctuations in economic activity.
B)structural changes in the economy.
C)changes in technology.
D)the aging of the population.

Question 12

The duration of unemployment rose significantly more during the 2008/09 recession relative to previous recessions.

Question 13

Other things equal, the higher the reservation wage, the more likely one is to be unemployed.

Question 14

Which age group tends to have the highest unemployment rates?

A)16-19 year olds
B)20-24 year olds
C)25-54 year olds
D)65 and over

Question 15

Which of the following types of unemployment is considered to be the most controllable through demand-side macroeconomic policy?

A)Frictional unemployment
B)Natural unemployment
C)Cyclical unemployment
D)Structural unemployment

Question 16

In 2001, the U.S.economy entered a recession and unemployment rose.Which one of the following types of unemployment was most likely caused by the recession?

A)Cyclical unemployment
B)Full unemployment
C)Structural unemployment
D)Funemployment

Question 17

Today people have 7-10 jobs over their lifetime.

Question 18

The program suggested by the textbook author provides a job for everyone.

Question 19

In the U.S.potential output in the long run tends to:

A)remain constant
B)rise at a trend rate of 2.5 to 3.5 percent per year.
C)fluctuate between 4.5 and 5.5 percent per year.
D)decline at a trend rate of 7.5 to 8.5 per year.

Question 20

Structural unemployment:

A)includes cyclical unemployment.
B)is generally greater than cyclical unemployment.
C)is generally less than cyclical unemployment.
D)cannot be reduced with demand side policies.

Question 21

Which of the following has been an effect of globalization and a large trade deficit?

A)Increased wages in the tradable sector
B)Increased employment in the tradable sector
C)Decreased employment in the tradable sector
D)Increased wages in the immigrant sector

Question 22

Which of the following institutional changes would tend to reduce the target rate of unemployment?

A)Greater ease with which families may support unemployed family members
B)The aging of the population
C)The availability of unemployment insurance
D)The increased incidence of two-earner families

Question 23

Globalization has:

A)lowered the target rate of unemployment
B)raised the target rate of unemployment
C)lowered cyclical unemployment
D)raised cyclical unemployment

Question 24

The target rate of unemployment can be affected by all of the following except the:

A)level of output.
B)population's age structure.
C)social and institutional structure.
D)relationship between inflation and unemployment.

Question 25

Globalization has tended to:

A)lower people's reservation wage
B)raise people's reservation wage
C)lower people's expectational wage
D)raise people's expectational wage

Question 26

Technological change can result in:

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

Question 27

What will likely lower cyclical unemployment?

A)Workers move to the non-tradable sector.
B)The Fed sells bonds.
C)The economy expands.
D)Okun's law changes.

Question 28

Globalization accompanied by large trade deficits most likely raises:

A) utilized unemployment.
B)cyclical unemployment.
C)the target rate of unemployment.
D)frictional unemployment.

Question 29

Why didn't unemployment rise during the 2000s even though the economy faced more and more globalization?

A)Globalization meant higher exports and lower imports, which created jobs
B)The government ran policies that created jobs in the non-tradable sector
C)Firms hired workers because they lowered their reservation wages
D)Limmigration policies meant immigrants took jobs Americans weren't willing to take

Question 30

Which of the following has not been an effect of globalization and a large trade deficit?

A)Lower wages in the tradable sector than there otherwise would have been.
B)Lower employment in the tradable sector than there otherwise would have been.
C)Significant decline in wages and unemployment in the non-tradable sector.
D)An increase in income disparities.

Question 31

Cyclical unemployment:

A)includes structural unemployment.
B)is generally greater than structural unemployment.
C)is generally less than structural unemployment.
D)can be reduced with demand side policies.

Question 32

The target rate of unemployment:

A)remains always at 0 percent.
B)remains always at 2 percent.
C)remains always at 5 percent.
D)can change over time.

Question 33

Mexico can produce vine-ripened tomatoes at a lower opportunity cost than firms in the United States.Through trade negotiations, the United States lifted quotas limiting the import of tomatoes from Mexico.Some firms in Florida, in the face of this new competition, had to close their farms and let go their workers.Many of the workers could not find new jobs right away.What type of unemployment describes the workers' situation?

A)Cyclical unemployment
B)Full unemployment
C)Sructural unemployment
D)Target unemployment

Question 34

Over the past several years, the target rate of unemployment has risen.Which of the following would not be used to explain this?

A)Congress passed a bill that requires the target rate to rise along with rising government deficits
B)the workforce is getting younger
C)more women have entered the workforce
D)government has expanded income support programs

Question 35

The wage a person requires before accepting a job is referred to as the_____ wage:

A)compensating
B)minimum
C)reservation
D)psychological

Question 36

The fact that more women have entered the labor force has:

A)raised the target rate of unemployment
B)lowered the target rate of unemployment
C)raised cyclical unemployment
D)lowered cyclical unemployment

Question 37

Immigration is

A)bad for all citizens in the United States.
B)good for all citizens in the United States.
C)both good and bad for the U.S.economy.
D)is neither good nor bad for citizens in the United States.

Question 38

A decline in the number of immigrants into the United States would most likely reduce:

A)frictional unemployment
B)the number of discouraged workers
C)cyclical unemployment.
D)the target rate of unemployment.

Question 39

A reservation wage that is higher than the equilibrium wage creates:

A)structural unemployment
B)cyclical unemployment
C)target unemployment
D)potential unemployment

Question 40

What will likely lower structural unemployment?

A)People lower their reservation wages.
B)The labor force participation rate rises.
C)The Fed sells bonds.
D)The economy expands.

Question 41

With respect to the unemployment problem, individual responsibility framework supporters generally take the position that:

A)government should guarantee each person a job.
B)government should eliminate structural and cyclical unemployment.
C)each person should have a job commensurate with their training or past job experience.
D)individuals should be responsible for finding their own jobs.

Question 42

Why does the minimum job pay a maximum of $10 an hour?

A)To limit the number of people who will participate.
B)To provide a living wage to all those who participate.
C)To provide an attractive alternative to dangerous jobs.
D)To compete with the Federal minimum wage of $7.25 per hour.

Question 43

Why would students be prevented from joining the minimum jobs program?

A)They would be considered overqualified.
B)They would be judged as unreliable.
C)They would overwhelm the system looking for summer work.
D)They possess too much intelligence to join this program.

Question 44

According to the individual responsibility framework, which of the following would be most likely counted as unemployed?

A)A person graduates from a job-training program but cannot find a job.
B)A person has a lower reservation wage than the equilibrium wage, and cannot find a job.
C)A person has a higher reservation wage than the equilibrium wage and cannot find a job.
D)A person who has looked for a job for 24 months and can't find one.

Question 45

If a politician adheres to the social responsibility framework, which of the following would not be mentioned in their campaign manifesto?

A)Unskilled workers should not have to accept jobs below a living wage
B)Part-time workers who would like to work full time cannot find it
C)People with enormous education and training cannot find a job that uses their skills
D)Individuals who are unemployed can create their own jobs

Question 46

Which of the following groups would be eligible for the author's job program?

A)Students
B)Immigrants
C)Non-students
D)Retirees

Question 47

A jobs program that offers higher wages to those with higher education:

A)is better than a jobs program that offers equal wages to all.
B)is worse than a jobs program that offers equal wages to all.
C)raises the costs of the program.
D)lowers the cost of the program.

Question 48

Why doesn't the minimum job proposal offer jobs commensurate with people's skills and education?

A)The monitoring costs of such a job would be too high because people will claim to have high skills when they really don't.
B)These people can find such jobs in the marketplace because their skills are valued, making them in high demand.
C)The proposal doesn't believe these people provide more productive skills that other workers.
D)These people are holding out for a job in the marketplace.Providing them with jobs wouldn't be offering a minimum job, which is the program's objective.

Question 49

The jobs program suggested by the author was put forward in order to:

A)argue against the individual responsibility framework.
B)argue against the social responsibility framework.
C)provide a middle ground approach to solving the unemployment problem.
D)sell a new book that he is publishing that deals with eliminating unemployment.

Question 50

Why doesn't the minimum job proposal provide output directly useful to the marketplace?

A)The monitoring costs of such a job would be too high.
B)If it did, it might be replacing jobs otherwise provided by the market.
C)It would provide training to participants better provided by other programs.
D)To compete with the Federal minimum wage of $7.25 per hour.

Question 51

If a politician adheres to the individual responsibility framework, which of the following would not be mentioned in their campaign manifesto?

A)The unemployed are not looking hard enough for a job
B)The unemployed are too picky in their job requirements
C)The unemployed lack the entrepreneurial spirit
D)The unemployed deserve jobs at respectable wages

Question 52

It can be argued that the minimum jobs proposal is preferable to a minimum wage law because:

A)it provides more job opportunities to women.
B)it cannot be overturned by the federal government.
C)it puts a floor on the wage as well as on the nature of the job.
D)it applies to students and non-students.

Question 53

With respect to the unemployment problem, social responsibility framework economists generally take the position that:

A)government should guarantee each person a satisfying and high-paying job.
B)government should eliminate only frictional unemployment.
C)each person should have a job commensurate with their training or past job experience.
D)individuals should be responsible for finding their own jobs.