Deck 6: Unemployment

Question 1

As of 2010,approximately what percentage of the U.S.population participated in the civilian labor force?

A)30 percent.
B)40 percent.
C)50 percent.
D)60 percent.

Answer 1

50 percent.

Question 2

Which of the following is included in the labor force?

A)A student who is still in school but not working or looking for work.
B)A part-time store clerk who is looking for another job.
C)A person who voluntarily runs a charity.
D)A person who spends the entire day taking care of his or her own young children at home.

Answer 2

A part-time store clerk who is looking for another job.

Question 3

The macro consequence of unemployment is

A)Lost output for the economy.
B)Lost income for the individual worker.
C)A leftward shift in the production possibilities curve.
D)A 1 percent decrease in GDP for every 1 percent decrease in unemployment.

Answer 3

Lost output for the economy.

Question 4

People are not part of the labor force when they

A)Go on vacation.
B)Are old enough to work but choose not to work.
C)Suffer from a temporary illness that keeps them away from their job.
D)None of the choices are correct.

Question 5

The most widely used measure of the unemployment rate is found by the

A)U.S.Department of Labor in surveys of businesses to determine the number of employees as a percentage of the total labor force.
B)U.S.Census Bureau in monthly surveys that examine whether people are working or are willing to work.
C)U.S.Census Bureau in its census of the population every 10 years.
D)Council of Economic Advisers, which summarizes its nationwide surveys in its yearly report to the president.

Question 6

When the labor force participation rate is declining,the

A)Unemployment rate is rising faster than the total population rate.
B)Percentage of the working-age population that is outside the labor force is declining.
C)Percentage of the working-age population that is willing and able to work is declining.
D)Percentage of the total population that is employed is rising.

Question 7

If more teenagers stay in school longer rather than dropping out and entering the labor force,

A)The production possibilities curve shifts outward.
B)The production possibilities curve shifts inward.
C)The production possibilities curve remains unchanged.
D)The unemployment rate goes up.

Question 8

To be officially counted as unemployed,one must be

A)Either not working or working only part-time.
B)Not employed at a full-time job.
C)Actively seeking employment and currently not working.
D)None of the choices are correct.

Question 9

Unemployment is defined as

A)The active search and inability of labor force participants to find jobs.
B)The active search and inability of citizens to find jobs that utilize their capabilities.
C)The proportion of the total population that is unemployed.
D)A decrease in the labor force.

Question 10

If a nation experiences a year of unusually high immigration that increases the size of the labor force,we can conclude that the

A)Nation will choose a different point on the production possibilities curve.
B)Nation's production possibilities curve will shift outward.
C)Nation's production possibilities curve will shift inward.
D)Nation's capital per worker will rise.

Question 11

When an economy enters a recession,the

A)Duration of unemployment rises.
B)Cost of unemployment falls.
C)Number of unemployed falls.
D)Number of discouraged workers falls.

Question 12

For the labor force to definitely increase,

A)There must be an increase in total population.
B)There must be an increase in immigration.
C)People must turn from being discouraged workers into people actively seeking employment.
D)None of the choices are correct.

Question 13

The proportion of the labor force that is unemployed is the

A)Employment index.
B)Underemployed rate.
C)Unemployment rate.
D)Okun's Law.

Question 14

Those that work part-time and do not desire full-time employment are referred to as

A)Employed.
B)The phantom unemployed.
C)Underemployed.
D)Discouraged workers.

Question 15

The benefits to the United States of outsourcing include all of the following except

A)Foreign firms insource or send jobs to the United States.
B)U.S.productivity rises,resulting in higher profits at U.S.firms that outsource.
C)Higher domestic labor cost for U.S.firms.
D)Greater domestic investment by U.S. firms that outsource.

Question 16

The observation that a 1 percent increase in unemployment leads to a 2 percent decrease in real output is known as

A)A recession.
B)A Lucas Wedge.
C)Okun's Law.
D)Under allocation of resources.

Question 17

Which of the following would not increase the physical production possibilities curve?

A)Greater constraints for oil drilling companies.
B)Increased availability of factors of production.
C)Increased technology.
D)None of the choices are correct.

Question 18

When the economy is below full employment,it is producing

A)On the production possibilities curve.
B)Beyond the production possibilities curve.
C)Inside the production possibilities curve.
D)None of the choices are correct.

Question 19

Production possibilities are the

A)Alternative combinations of output that can be produced using all available resources and technology.
B)Various production methods that producers can employ.
C)Various types of input that each manufacturing facility can choose to employ.
D)Percentage of output produced by each worker.

Question 20

Who among the following is included in the labor force?

A)A hardworking homemaker who does not want to be employed outside the home.
B)A man doing 10 years in prison for armed robbery.
C)The president of Microsoft.
D)A retired commander of the armed forces.

Question 21

When migrant workers seek employment after the crops have been picked,the unemployment rate goes up.This situation is an example of

A)Frictional unemployment.
B)Seasonal unemployment.
C)Structural unemployment.
D)Cyclical unemployment.

Question 22

Underemployment refers to

A)The same thing as unemployment.
B)A person who is lazy and not working hard at her job.
C)A person who is not able to use her full capabilities in her job.
D)A discouraged worker.

Question 23

All of the following are considered to be possible side effects of increased unemployment except

A)Admissions to mental institutions.
B)Fatal heart attacks.
C)Decreased stress levels.
D)None of the choices are correct.

Question 24

Which of the following falls into the largest unemployment category during a recession?

A)A recent college graduate entering the labor force for the first time.
B)A woman who left the labor force to raise children and now wants to return to work.
C)A factory worker who is laid off because of a temporary plant closing.
D)A teenager looking for his or her first summer job.

Question 25

Individuals who are working part-time while seeking full-time employment are classified as

A)Unemployed.
B)Underemployed.
C)Discouraged workers.
D)Phantom unemployed.

Question 26

The type of unemployment that increases most when teenagers look for temporary summer jobs is

A)Frictional unemployment.
B)Structural unemployment.
C)Seasonal unemployment.
D)Cyclical unemployment.

Question 27

The official unemployment statistics may exaggerate the significance of unemployment by including the

A)Underemployed.
B)Phantom unemployed.
C)Discouraged worker.
D)High school dropout.

Question 28

Suppose there are 6 million unemployed workers actively seeking a job.After a period of time,1,500,000 of these workers become discouraged and no longer look for employment.If everything else remains constant,the unemployment rate will

A)Decrease.
B)Increase.
C)Remain unchanged until the unemployed find a job.
D)Increase initially but decrease when the phantom unemployed receive unemployment benefits.

Question 29

Which of the following groups would be classified as unemployed when calculating the unemployment rate?

A)Underemployed workers.
B)Discouraged workers.
C)The phantom unemployed.
D)Individuals who are neither employed nor actively seeking a job.

Question 30

Discouraged workers

A)Do not actively seek employment although they desire to be employed.
B)Are part of the labor force.
C)Are workers who are unhappy in their jobs.
D)Are counted as part of total unemployment.

Question 31

The phantom unemployed are

A)People who report that they are actively seeking a job even when they have little or no intention of finding one.
B)People who want a job but aren't looking because they don't expect to find one.
C)People who lack the skills to be employed.
D)Workers with very high rates of absenteeism.

Question 32

Which of the following groups could increase in size and cause a significantly higher unemployment rate?

A)Discouraged workers.
B)Underemployed workers.
C)Phantom unemployed.
D)Children under the age of 16.

Question 33

Suppose there are 4 million people in an economy that are classified as unemployed.After a more thorough investigation,it becomes obvious that 200,000 of these people are actually phantom unemployed.As a result of this discovery,the unemployment rate will

A)Decrease.
B)Increase.
C)Remain unchanged until the unemployed find a job.
D)Increase initially but decrease when the phantom unemployed receive unemployment benefits.

Question 34

Which of the following types of unemployment would best characterize a snow ski instructor's unemployment during the summer months?

A)Structural unemployment.
B)Frictional unemployment.
C)Seasonal unemployment.
D)Cyclical unemployment.

Question 35

Part-time workers who desire full-time employment are

A)Underemployed and contribute to the unemployment statistic.
B)Underemployed but do not contribute to the unemployment statistic.
C)Not part of the labor force and do not contribute to the unemployment statistic.
D)Discouraged workers and contribute to the unemployment statistic.

Question 36

The phantom unemployed are

A)Not part of the labor force because they do not desire to work.
B)Unemployed and cause the unemployment statistic to overstate the level of unemployment.
C)Discouraged and cause the unemployment statistic to understate the level of unemployment.
D)Classified as cyclically unemployed.

Question 37

When the U.S.unemployment rate decreased in the late 1990s,so did all of the following except

A)Poverty rate.
B)Income per capita.
C)Child abuse.
D)None of the choices are correct.

Question 38

Of the following reasons for unemployment,which will increase most because of a recession?

A)Job losers.
B)Reentrants.
C)New entrants.
D)Job leavers.

Question 39

Studies have shown that unemployment causes

A)Increased expenditure on food.
B)More spending on child care because more mothers go to work.
C)Increased health problems.
D)Little impact since most people receive unemployment benefits.

Question 40

A 30-year-old stay-at-home son tells his parent he is looking for work but cannot find a job.When the parent finds the son a job,he refuses to take it.The 30-year-old can best be classified as

A)A discouraged worker.
B)Phantom unemployed.
C)Structurally unemployed.
D)Underemployed.

Question 41

Nancy returns to school to study medicine.After graduating,she spends six months looking for a job.During this period,she is considered

A)Cyclically unemployed.
B)Structurally unemployed.
C)Frictionally unemployed.
D)Seasonally unemployed.

Question 42

When there is a mismatch between the skills required for a job and the skills of job seekers,the unemployment that results is an example of

A)Frictional unemployment.
B)Structural unemployment.
C)Cyclical unemployment.
D)Seasonal unemployment.

Question 43

In terms of the musical chairs analogy in the text,which of the following is a description of structural unemployment?

A)There are too few chairs.
B)There are too many chairs.
C)There are enough chairs,but some are not the right size.
D)There are enough chairs, but it takes time to find one.

Question 44

In terms of the musical chairs analogy in the text,which of the following is a description of cyclical unemployment?

A)There are too few chairs.
B)There are too many chairs.
C)There are enough chairs,but some are not the right size.
D)There are enough chairs, but it takes time to find one.

Question 45

If workers do not have the skills that are required in the job market,which of the following will occur?

A)Structural unemployment.
B)Seasonal unemployment.
C)Cyclical unemployment.
D)Frictional unemployment.

Question 46

Samantha recently quit her job at the university because she is looking for another job for which she is qualified in a small town.Samantha is

A)Frictionally unemployed.
B)Structurally unemployed.
C)A discouraged worker and is part of the unemployment statistic.
D)Not part of the labor force and does not contribute to the unemployment rate.

Question 47

Which of the following unemployment categories is most clearly related to the rate of growth in real GDP?

A)Structural.
B)Seasonal.
C)Frictional.
D)Cyclical.

Question 48

Long-term changes in demand that make some goods obsolete are likely to have their greatest impact on

A)Structural unemployment.
B)Cyclical unemployment.
C)Frictional unemployment.
D)Seasonal unemployment.

Question 49

Full employment in the U.S.economy means that

A)Frictional unemployment has been reduced to zero.
B)The total unemployment rate has been reduced to zero.
C)The economy has reached the lowest level of unemployment compatible with price stability.
D)Structural unemployment has reached its minimum as a result of increased spending, and the economy is moving toward the peak of the business cycle.

Question 50

Structural unemployment occurs when

A)Workers do not have the skills required to fill the vacant positions in the job market.
B)Firms fail in the normal course of business activity.
C)An industry experiences a seasonal downturn.
D)There is inadequate demand for labor.

Question 51

Frictional unemployment could result from each of the following except

A)The reallocation of employees to growing industries.
B)The inability of people to find work during certain seasons of the year.
C)The opportunity for people to leave jobs in which they are underemployed.
D)None of the choices are correct.

Question 52

After being fired from a job,some people find that it may take several months to find a new job in the same type of work.This is an example of which of the following types of unemployment?

A)Structural unemployment.
B)Frictional unemployment.
C)Cyclical unemployment.
D)Seasonal unemployment.

Question 53

Which of the following government policies or programs would be most appropriate to offset cyclical unemployment?

A)Those that stimulate more demand.
B)More job training.
C)Additional job placement services.
D)Additional health services to counter the effects of unemployment.

Question 54

During an economic downturn,consumers spend considerably less on goods and services.This results in layoffs that are classified as

A)Cyclical.
B)Structural.
C)Frictional.
D)Seasonal

Question 55

Which of the following government programs would be most appropriate to counteract cyclical unemployment?

A)Increased job placement services.
B)Greater government expenditures to increase GDP.
C)Year-round school.
D)More job training programs.

Question 56

The type of unemployment that economists generally associate with normal growth of the labor force and expanding job opportunities in a dynamic economy is

A)Frictional unemployment.
B)Seasonal unemployment.
C)Cyclical unemployment.
D)Structural unemployment.

Question 57

Frictional unemployment goes up when

A)A student quits work to return to school at the end of the summer.
B)A corporation transfers a worker to another city.
C)A worker quits one job to search for another in the same line of work.
D)There is inadequate demand for labor.

Question 58

Automobile workers in Detroit who are unemployed because of foreign imports at the same time that job vacancies exist for coal miners in West Virginia would most likely be classified as

A)Structurally unemployed.
B)Cyclically unemployed.
C)Frictionally unemployed.
D)Seasonally unemployed.

Question 59

An inner-city teenager without a high school diploma is unable to find work because all of the available jobs require a certain minimum reading skill level.Which of the following best characterizes the teenager's circumstances?

A)A discouraged worker.
B)Structurally unemployed.
C)Phantom unemployed.
D)Underemployed

Question 60

Tom worked at NASA for 13 years.In the 14^th year,his job was automated,resulting in him losing his job.He looked for a new job for 18 months before finding a job in a different line of work that paid less.During his 18-month job search,Tom was considered to be

A)Cyclically unemployed.
B)Structurally unemployed.
C)Frictionally unemployed.
D)Seasonally unemployed.

Question 61

Outsourcing is the

A)Unemployment that is inevitable when jobs leave a country.
B)Relocation of production from domestic companies to foreign countries.
C)Loss of output because of an increase in unemployment.
D)Movement of workers to foreign countries where there are more jobs.

Question 62

During which one of the following decades was the goal of 4 percent unemployment set as an acceptable compromise between our full employment and inflation goals?

A)1960s.
B)1970s.
C)1980s.
D)1990s.

Question 63

Unemployment was fairly low during all of the following periods except

A)World War II.
B)The Korean War.
C)The late 1990s.
D)The Great Depression.

Question 64

Unemployment was particularly high during

A)The Great Depression.
B)World War II.
C)The Korean War.
D)The Vietnam War.

Question 65

All of the following are true about outsourcing of jobs except that it

A)Occurs because labor is cheaper in other countries.
B)Increases specialization.
C)Reduces costs and increases profits for companies.
D)Ultimately leaves the United States worse off.

Question 66

How have the unemployment components of the natural rate of unemployment changed over the past 20 years?

A)Frictional unemployment has increased and structural unemployment has increased.
B)Frictional unemployment has decreased and structural unemployment has decreased.
C)Frictional unemployment has decreased and structural unemployment has increased.
D)Frictional unemployment has increased and structural unemployment has decreased.

Question 67

Which of the following was a stated goal of the Humphrey-Hawkins Act?

A)Zero percent unemployment rate.
B)Zero percent inflation rate.
C)4 percent unemployment rate.
D)4 percent inflation rate.

Question 68

Unemployment was fairly low during

A)The Great Depression.
B)World War II.
C)The 1930s.
D)The recession of 1981-1982.

Question 69

What is the likely consequence of an unemployment rate falling below the rate at which "full employment" is achieved?

A)The threat of recession.
B)Increased inflationary pressures.
C)An increase in discouraged workers.
D)None of the choices are correct.

Question 70

As a result of outsourcing,

A)Domestic workers may become more productive.
B)Profits decrease for domestic companies.
C)GDP definitely decreases.
D)Unemployment must increase in the long run.

Question 71

According to The New Yorker cartoon,one restaurant patron states that since he has recently stopped looking for a job,he has helped to lower the unemployment rate.He is:

A)Wrong in that his action raised the unemployment rate.
B)Right in that he became a discouraged worker.
C)Wrong in that he is still in the labor force.
D)None of the choices are correct.

Question 72

The Employment Act of 1946 set which of the following goals for the economy?

A)A zero unemployment rate.
B)A zero inflation rate.
C)Lowering cyclical and structural unemployment within reasonable but nonspecific bounds.
D)Achieving a 4 percent target in seasonal and frictional unemployment.

Question 73

According to an In the News article "Carpentry Work Crashing Down," Labor demand for carpenters remains low as the economy climbs out of the recent recession due to

A)Cyclical unemployment from lack of housing demand.
B)Frictional unemployment due to a lumber shortage.
C)Structural unemployment due to a mismatch between workforce skills and employer needs.
D)None of the choices are correct.

Question 74

Why has structural unemployment in the United States increased over the last 20 years?

A)Rapid technology changes have eliminated the needs for certain skill sets.
B)Companies are increasingly outsourcing certain task to cheaper foreign markets.
C)Increased trade with other countries has shut down U.S.factories competing with import industries.
D)All of the choices are correct.

Question 75

The lowest level of unemployment compatible with price stability

A)Is referred to as full employment.
B)Is estimated at between 0 and 2 percent unemployment.
C)Allows for some cyclical unemployment.
D)Is equal to the natural rate of unemployment plus the inflation rate.

Question 76

One cartoon in the text shows a contented rich man saying,"I don't like six-percent unemployment either.But I can live with it." The point is that

A)Not everyone experiences the effects of unemployment equally.
B)Everyone agrees that unemployment should be the top priority for government action.
C)No one can avoid unemployment or the effects of unemployment.
D)It is good to be an independent analyst because those types of jobs are always in demand.

Question 77

Someone 18 years old who is not employed and is not actively seeking work is considered

A)Not in the labor force.
B)In the labor force.
C)Employed.
D)Unemployed.

Question 78

When jobs are outsourced,

A)Unemployment increases significantly.
B)Corporations lose money.
C)The economy begins to collapse.
D)Production possibilities expand.

Question 79

The natural rate of unemployment includes

A)Seasonal and cyclical unemployment only.
B)Cyclical and frictional unemployment only.
C)Structural and seasonal unemployment only.
D)Frictional and structural unemployment only.

Question 80

Suppose the working-age population of Country A is 200 million,the number employed is 130 million,and the number unemployed is 10 million.What is the labor force participation rate?

A)60 percent.
B)70 percent.
C)65 percent.
D)75 percent.