Deck 8: Unemployment and Inflation

Question 1

Measured unemployment includes discouraged workers.

Answer 1

False

Question 2

Suppose U = the number of adults who are unemployed; E = the number of adults who are employed; and NLF = the number of adults not in the labor force.Which expression would equal the labor force participation rate?

A) U/(U + E)
B) E/(U + E)
C) U/(U + E + NLF)
D) E/(U + E + NLF)
E) (U + E)/(U + E + NLF)

Answer 2

(U + E)/(U + E + NLF)

Question 3

Which of the following is not considered a cost of unemployment?

A) loss of self-respect by those who are unemployed
B) waste of the economy's resources
C) negative psychological effects on those who have lost their jobs
D) higher inflation rates
E) loss of income by those who are unemployed

Answer 3

higher inflation rates

Question 4

Which of the following is not a cost of unemployment?

A) Unemployed individuals suffer a loss of income.
B) Unemployed individuals are more likely to have emotional or psychological problems.
C) Unemployed individuals can lose their job skills over time.
D) Unemployment causes production to decrease from what it could be.
E) The opportunity cost of unemployment is a higher inflation rate.

Question 5

The unemployment rate rises any time there is an increase in the number of unemployed.

Question 6

The unemployment rate is the

A) percentage of people in the economy who do not hold jobs
B) percentage of the labor force that does not have a job
C) number of people in the economy who have given up looking for employment
D) number of people in the labor force without jobs
E) ratio of unemployed to employed high school graduates in the economy

Question 7

The unemployment rate will increase whenever there is a(n)

A) increase in the number of persons classified as unemployed
B) increase in the number of unemployed relative to the size of the labor force
C) increase in the size of the U.S.population and there is no change in the number of persons classified as employed
D) reduction in the size of the labor force
E) reduction in the size of the labor force while the number of unemployed decreases

Question 8

Consider an economy made up of 100 people,60 of whom hold jobs,10 of whom are looking for work,and 15 of whom are retired.The number counted as unemployed is

A) 10
B) 15
C) 40
D) 30
E) 90

Question 9

Discouraged workers are included in the labor force figures but not in unemployment figures.

Question 10

The labor force consists of all adults who are currently employed.

Question 11

Consider an economy with an adult population of 100,50 of whom hold jobs,10 of whom are looking for work,and 15 of whom are retired.The labor force participation rate is

A) 100 percent
B) 60 percent
C) 50 percent
D) 40 percent
E) 10 percent

Question 12

Which of the following people would be counted in the labor force?

A) Chou,who lost his job and last looked for work three months ago
B) Stephanie,who holds a Ph.D.in history,but can only find part-time employment at a fast-food restaurant
C) Jordan,who would like to work as a stockbroker but is now a househusband
D) Steffan,who thinks he could easily earn $100,000 per year,despite the opinion of the psychiatrist at the state hospital where he is a patient
E) Monique,age 90,who is enjoying her retirement in Montana

Question 13

People who are not currently employed,but say they want a job,are counted as unemployed only if they

A) have previously held a job
B) are actively seeking employment
C) are willing to accept a reasonable offer
D) are between 16 and 65 years of age
E) are willing to accept any offer of employment

Question 14

Consider an economy made up of 100 people,60 of whom hold jobs,10 of whom are looking for work,and 15 of whom are retired.The number of people in the labor force is

A) 30
B) 60
C) 85
D) 90
E) 70

Question 15

A major cost of unemployment is lost production.

Question 16

A discouraged worker is one who

A) is underqualified for his current job
B) dislikes his current job but is afraid to quit
C) drops out of the labor force because he cannot find a job
D) quits his job because the possibility of advancement was very low
E) is overqualified for his current job

Question 17

Which of the following people would be counted as unemployed?

A) a retired naval officer
B) a full-time student in high school
C) a father of preschool children who does not want to work
D) an inner-city teenager who has given up looking for work after a year of trying
E) a downhill ski instructor who looks for work during the summer

Question 18

Suppose U = the number of adults who are unemployed; E = the number of adults who are employed; and NLF = the number of adults not in the labor force.Which expression would equal the unemployment rate?

A) U/(E + NLF)
B) U/E
C) U/(U + E)
D) U/(U+ NLF)
E) U/(U + E - NLF)

Question 19

The labor force consists of all

A) the people in the economy who are not retired
B) people in the economy over 16 years of age
C) the adults in the economy between 18 and 65 years old who are able to work
D) the noninstitutionalized population over 16 in the economy who hold jobs or are looking for them
E) the citizens in the economy who are graduates of high school

Question 20

Which of the following are classified as "discouraged workers"?

A) all those between 16 and 65 who are neither disabled nor in an institution and are also neither employed nor seeking employment
B) labor force members who have chosen early retirement because they dislike their work or think the pay is too low
C) members of the noninstitutional population who say they want to be employed but are not searching for a job
D) members of the labor force who are looking for a job but cannot find one
E) anyone in the population who is not working

Question 21

Which of the following people would be classified as unemployed?

A) a person who wants a job as a fashion model but cannot find work in that field
B) someone who quits a part-time job to attend school full-time
C) someone who gives up looking for a job
D) a person who works at a job that underemploys his or her skills
E) a person who works part-time and would rather work full-time

Question 22

The unemployment rate will decrease whenever there is a(n)

A) increase in the number of persons classified as unemployed
B) decrease in the number of unemployed relative to the size of the labor force
C) decrease in the size of the population and there is no change in the number of persons classified as employed
D) reduction in the size of the labor force
E) decrease in the number of unemployed and the population does not change

Question 23

Since World War II,the U.S.economy has experienced

A) a decrease in the civilian labor force
B) a decrease in the number of unemployed persons
C) a decrease in the number of employed persons
D) an increase in the labor force participation rate of women
E) a declining unemployment rate as a general trend

Question 24

An individual with a Ph.D.in physics,who can find employment only in a pizza parlor,would be considered as

A) a discouraged worker
B) underemployed
C) overemployed
D) unemployed
E) not in the labor force

Question 25

Which of the following is not a way to become officially unemployed?

A) quit your job to look for a better job in another part of the country
B) be fired from your job
C) look for a job after being out of the labor force for five years
D) retire
E) look for a job only for the period in the summer that you are out of school

Question 26

Since the end of World War II,the U.S.unemployment rate

A) has displayed a downward trend
B) has displayed an upward trend
C) has remained almost constant from year to year
D) was generally higher during the 1970s than during the 1990s
E) has not displayed any clear pattern

Question 27

If top government officials claim that "more people are working now than ever before," which of the following must be true?

A) The unemployment rate is lower now than ever before.
B) The number of people unemployed is lower now than ever before.
C) The employment rate is higher now than ever before.
D) The number of people in the labor force is higher now than ever before.
E) The number of people employed is higher now than ever before.

Question 28

Since World War II,labor force participation rates have

A) increased for males and females
B) remained nearly constant for males and increased for females
C) decreased for males and decreased for females
D) increased for males and decreased for females
E) decreased for males and increased for females

Question 29

Since World War II,the average duration of unemployment in the U.S.

A) increased
B) decreased
C) has shown no change
D) decreased until 1972,then increased down to the present
E) decreased until 1984,then increased down to the present

Question 30

The unemployment rate for blacks in the United States is higher than that for whites.

Question 31

The labor force participation rate is the number of people

A) employed divided by the adult population
B) employed divided by the number of people in the labor force
C) in the labor force divided by the adult population
D) unemployed divided by the number of people in the labor force
E) in the labor force divided by the number of people employed

Question 32

Suppose the official unemployment rate is 10 percent.We can conclude without question that

A) the same 10 percent of the people in the economy were out of work for the entire year
B) one of every ten people in the labor force is currently unemployed
C) the same 10 percent of the people in the labor force were out of work for the entire year
D) every person in the labor force was out of work for 10 percent of the year
E) 10 percent of the people in the economy were each out of work for 10 percent of the year

Question 33

The labor force participation rate for women in the United States has

A) stayed the same over the last 30 years
B) increased significantly since the 1950s
C) been influenced by decreasing real wages since 1960
D) fluctuated substantially both upward and downward since the 1950s
E) increased only very slightly since the 1950s

Question 34

Which of the following people would be counted among the unemployed?

A) a new college graduate selling newspaper advertising part-time while looking for other work
B) a new college graduate selling newspaper advertising full-time while looking for other work
C) a new college graduate selling newspaper advertising part-time and not looking for other work
D) a new college graduate who gets tired of selling newspaper advertising and takes off on a motorcycle trip to Alaska
E) a new college graduate not qualified for any of the jobs available in his small town

Question 35

When workers are over-qualified for their current jobs or can find only part-time work,we say they are

A) unemployed
B) discouraged workers
C) not in the labor force
D) overemployed
E) underemployed

Question 36

Which of the following groups tends to have the highest unemployment rate in the United States?

A) black teenagers
B) black men
C) white women
D) black women
E) white teenagers

Question 37

Which of the following is true about labor force participation?

A) When workers become unemployed,the labor force participation rate declines.
B) When the unemployed become "discouraged workers," the labor force participation rate declines.
C) When workers are not fully using their skills,the labor force participation rate decreases.
D) Since the 1950s the labor force participation rate of women has decreased in the United States.
E) The trend toward earlier retirement has increased the labor force participation rate in the United States.

Question 38

Which of the following groups has historically had the highest unemployment rate?

A) professional workers
B) white teenagers
C) black teenagers
D) black adults
E) white adults

Question 39

Which of the following is true regarding labor force participation rates in the United States since the 1950s?

A) The rates for both men and women have risen.
B) The rate for women has fallen; that for men has risen.
C) The rate for men has fallen; that for women has increased.
D) The rates for both men and women have fallen.
E) The rates for both men and women have remained fairly constant.

Question 40

Different demographic groups

A) have identical durations of unemployment
B) have identical unemployment rates
C) are weighted equally in the official unemployment rate
D) have different unemployment rates
E) are weighted more heavily in the official unemployment rate if they have larger unemployment rates

Question 41

Cyclical unemployment results from

A) a mismatch of skills
B) being in the wrong geographical location
C) taking the time to find the best job
D) seasonal decreases in demand for labor
E) a recession in the economy

Question 42

A person whose skills do not match the available job openings is considered frictionally unemployed.

Question 43

The type of unemployment most likely to be experienced by a touring professional golfer is

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

Question 44

The impact of __________ unemployment is removed from official unemployment figures that are reported monthly.

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

Question 45

Jacqueline,a brilliant new Ph.D.in economics,has turned down many job offers because she hopes eventually to teach at one of the top ten universities in her field.The type of unemployment she is experiencing is

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

Question 46

In which of the following industries are workers least likely to suffer from cyclical unemployment?

A) new home construction
B) automobile manufacturing
C) carpet installation
D) education
E) tourism

Question 47

Most of the unemployment during the Great Depression was cyclical unemployment.

Question 48

Sharon was being treated unfairly by her boss,so she stormed off the job and two weeks later found another position.For two weeks Sharon experienced

A) cyclical unemployment
B) structural unemployment
C) seasonal unemployment
D) frictional unemployment
E) being out of the labor force

Question 49

Government fiscal policies that attempt to stimulate aggregate demand are often aimed at reducing cyclical unemployment.

Question 50

Which of the following types of unemployment is the hardest to reduce?

A) cyclical
B) structural
C) voluntary
D) involuntary
E) speculative

Question 51

Your cousin recently graduated from Harvard Law School and has not found a job after looking for one last week.She can be described as

A) frictionally unemployed
B) structurally unemployed
C) seasonally unemployed
D) not part of the labor force
E) a discouraged worker

Question 52

Ginger quits her job as a secretary because she cannot handle the stress.It takes her three weeks of solid effort to land a job as a receptionist.Over these three weeks,she would be considered frictionally unemployed.

Question 53

Frictional unemployment refers to unemployment that results from

A) a mismatch of skills
B) being in the wrong geographical location
C) taking the time to find the best job
D) seasonal decreases in demand for labor
E) a recession in the economy

Question 54

Jamal lost his job as a shipbuilder during 2004.His shipyard never reopened,and so his very specialized skills are no longer in demand.Jamal's unemployment is best classified as

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

Question 55

Structural unemployment refers to unemployment that results from

A) inefficiencies in the market for labor that prolong the job search
B) being in the wrong geographical location
C) taking the time to find the best job
D) seasonal decreases in demand for labor
E) a recession in the economy

Question 56

Which type of unemployment is most likely to help the economy become more efficient?

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

Question 57

The only job Justin ever holds is preparing income tax forms at H&R Block from January 2 to April 15.In March,while he is still working,he sends his resume to prospective employers.In March,he was counted as

A) cyclically unemployed
B) structurally unemployed
C) frictionally unemployed
D) part of the labor force
E) out of the labor force

Question 58

Juanita earned a B.S.in engineering and went to work for a defense contractor.When the government cut spending,Juanita and 99 others were laid off.The only other business in the town is growing grapes,but the growers refuse to hire laid-off engineers,knowing they will leave at the first opportunity.The unemployment Juanita is experiencing is

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

Question 59

Seasonal unemployment refers to unemployment that results from

A) a mismatch of skills
B) being in the wrong geographical location
C) taking the time to find the best job
D) seasonal decreases in demand for labor
E) a recession in the economy

Question 60

Most of the unemployment experienced in the United States during the Great Depression was

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

Question 61

Structural unemployment results from

A) a mismatch of skills
B) the availability of unemployment insurance
C) monetary cost and the time it takes to find the best job
D) seasonal decreases in demand for labor
E) prolonged declines in business activity

Question 62

If the official unemployment rate increases in August from its July level,we can conclude that __________ unemployment is responsible for the increase.

A) seasonal
B) cyclical
C) structural
D) frictional
E) any of the causes of

Question 63

Which of the following is most likely to reduce structural unemployment?

A) a reduction in wage rates
B) increasing efficiency of the job search through better information on local job openings
C) retraining workers in marketable skills
D) promotion of full employment through government stabilization policies
E) reducing the cost of job loss through enhanced unemployment compensation

Question 64

Full employment

A) exists when everyone in the economy has a job
B) exists when everyone who wants a job has one
C) exists when the unemployment rate is zero
D) exists when everyone in the labor force has a job
E) will always include some unemployment

Question 65

When the economy is at full employment,what types of unemployment may exist?

A) none
B) structural and frictional
C) seasonal and cyclical
D) frictional,cyclical,and structural
E) cyclical

Question 66

If the official unemployment rate increases in January from its December level because the Christmas season is over,we can conclude that __________ unemployment is responsible for the increase.

A) seasonal
B) cyclical
C) structural
D) frictional
E) any one of the causes of

Question 67

Which of the following is not consistent with full employment?

A) an unemployment rate of 5 percent or 6 percent
B) seasonal unemployment
C) structural unemployment
D) cyclical unemployment
E) frictional unemployment

Question 68

An increase in unemployment benefits is likely to do which of the following?

A) reduce a person's incentive to look for work
B) reduce the opportunity cost of being unemployed
C) provide a better safety net for employed families
D) make it more difficult for people to search longer for jobs appropriate to their skill levels
E) increase the need to accept the first job available after becoming unemployed

Question 69

Full employment is considered a major economic goal because

A) specialization is not possible without full employment
B) economic growth can only occur when there is full employment
C) the opportunity cost of unemployment is lost production
D) comparative advantage is not possible without full employment
E) inflation will be lower when full employment is achieved

Question 70

Workers who are temporarily unemployed but who normally find jobs quickly are called

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

Question 71

The best example of a frictionally unemployed worker is one who

A) reduces productivity by causing frictions in a business
B) is laid off during a recessionary period in the economy
C) is in the process of voluntarily switching jobs
D) is discouraged and not actively seeking work
E) cannot find a job that matches with his skills

Question 72

Unemployment arising from mismatch of skills is called

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

Question 73

If the official unemployment rate increases in March from its February level because of sluggish sales in the auto industry,we can conclude that __________ unemployment is responsible for the increase.

A) seasonal
B) cyclical
C) structural
D) frictional
E) any one of the causes of

Question 74

Cyclical unemployment results from

A) a mismatch of skills
B) being in the wrong geographical location
C) monetary cost and the time it takes to find the best job
D) seasonal decreases in demand for labor
E) prolonged declines in business activity

Question 75

Which type of unemployment is likely to increase the most in a recession?

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

Question 76

Seasonal unemployment results from

A) unrealistic expectations about the availability of employment
B) being in the wrong geographical location
C) taking the time to find the best job
D) decreases in demand for labor at certain times of the year
E) periodic increases in business activity

Question 77

Which of the following will most likely qualify for unemployment compensation benefits?

A) a new college graduate who cannot find work despite a desperate job search
B) an unemployed coal miner who has been receiving benefits for the past six months
C) a former retail clerk who quit her job because the boss was too demanding
D) a spot welder who has just gotten his first "pink slip" in the mail after ten years of continuous employment
E) an accountant who was fired from his last position for drinking alcohol on the job

Question 78

Which of the following statements about unemployment is true?

A) There is only one kind of unemployment.
B) Some unemployment exists even when the economy is healthy and growing.
C) Unemployment and inflation are not related.
D) People who are willing and able to work but have given up the search for a job are considered unemployed.
E) Voluntary unemployment refers to a situation in which people who really do not want to work only pretend to look for jobs.

Question 79

It is difficult to compare unemployment rates across countries because methods of measuring unemployment are not standardized.

Question 80

Which type of unemployment is experienced by a person who is laid off at an office because new technology reduces the need to handle customer service inquiries?

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