Deck 11: Unemployment and Labor Force Participation

Question 1

According to the Bureau of Labor Statistics,which of the following would be counted as unemployed?

A) discouraged workers
B) workers who are overqualified for their current position
C) workers who have a part-time job but want a full-time job
D) new graduates who are looking for their first job

Answer 1

new graduates who are looking for their first job

Question 2

Discouraged workers are people who:

A) have given up looking for work but would still like to work.
B) are willing and able to work but cannot find a job.
C) are looking for a job that pays more than they are currently earning.
D) are working for fewer hours than they want to.

Answer 2

have given up looking for work but would still like to work.

Question 3

A discouraged worker is a:

A) person working for fewer hours than he or she prefers.
B) worker being discouraged by his or her employer when asking for a promotion.
C) person who has given up looking for work but would still like a job if one is available.
D) unemployed person who has temporary part-time employment.

Answer 3

person who has given up looking for work but would still like a job if one is available.

Question 4

Which of the following is NOT a reason the unemployment rate is considered to be an incomplete indicator of the overall health of the labor market?

A) It does not measure how well people are matched to the jobs they do.
B) It does not count discouraged workers.
C) It does not correctly define the adult population.
D) It counts part-time workers who would like to work full time as employed.

Question 5

The labor force consists of:

A) employed workers only.
B) adults who do not have a job but who are looking for work.
C) employed workers and adults who do not have jobs but who are looking for work.
D) all adult noninstitutionalized civilians.

Question 6

Which of the following would NOT be counted as employed?

A) an underemployed person
B) an employee working overtime every day
C) a part-time worker
D) a discouraged worker

Question 7

Individuals who have given up looking for work but still would take a job are considered:

A) unemployed workers.
B) displaced workers.
C) discouraged workers.
D) part of the labor force.

Question 8

Why did 36,000 travel agents lose their jobs between 1999 and 2006?

A) There was a large decline in tourism in those years.
B) More people started making their travel arrangements online.
C) They spent too much time taking vacations of their own and got fired.
D) They became professional athletes.

Question 9

The presence of discouraged workers causes the measured unemployment rate to be:

A) correctly stated.
B) overstated.
C) understated.
D) either overstated,understated,or correctly stated.

Question 10

The unemployment rate measures the:

A) quality of jobs.
B) number of discouraged workers.
C) number of underemployed workers.
D) share of the labor force that is unemployed.

Question 11

A country has 50 million people,30 million of whom are adults.Of the adults,5 million are not interested in working,another 5 million are interested in working but have given up looking for work,and 5 million are still looking for work.Of those who do have jobs,5 million are working part time but would like to work full time,and the remaining 10 million are working full time.How many people in this country are in the labor force?

A) 15 million
B) 20 million
C) 25 million
D) 30 million

Question 12

Which of the following is an example of an unemployed person?

A) a retiree working as a volunteer in a hospital
B) a worker who is willing to work more hours if available
C) a recent college graduate looking for her first job
D) a full-time student working part time at night

Question 13

Discouraged workers are workers who have:

A) given up looking for work but would still like a job.
B) given up looking for work and are not available for work.
C) not given up looking for work but are not available for work.
D) not given up looking for work and still would like a job.

Question 14

Which of the following would the BLS define as a discouraged worker?

A) Quinton,who has a doctorate in chemistry,but works full time as a taxi driver
B) Robert,a retired teacher,who works full time as a greeter at a discount store
C) Mary,who was laid off last year and who was looking for a full-time job until last month
D) Susan,who has been unemployed for the past three years and is looking for a part-time job

Question 15

A country's total civilian noninstitutionalized adult population is 1 million,and 500,000 people in this country are working,with another 20,000 people looking for work.Which of the following statements about the labor force statistics in this country is accurate?

A) The employment rate is 50% and the unemployment rate is 2%.
B) The unemployment rate is 2% and the labor force participation rate is 52%.
C) The employment rate is 96.15% and the labor force participation rate is 52%.
D) The labor force is 500,000 and the labor force participation rate is 50%.

Question 16

Discouraged workers and underemployed workers are examples of:

A) workers not included in the unemployment rate.
B) populations that cause higher unemployment taxes.
C) users of unemployment insurance.
D) poor national employment planning.

Question 17

Which of the following would be considered unemployed?

A) Mark,laid off from his job as a bricklayer,returned to school full-time.
B) Sarah,a stay-at-home mom who earned nearly $80,000 per year in her previous job.
C) Tim,a 13-year-old high school student,is looking for a part-time job.
D) Janice,a senior in college,started job hunting early in the hope that she would have secured a job by the time she graduates in May.

Question 18

Discouraged workers are counted as part of the:

A) labor force.
B) unemployed.
C) employed.
D) adult population.

Question 19

A country has 50 million people,30 million of whom are adults.Of the adults,5 million are not interested in working,another 5 million are interested in working but have given up looking for work,and 5 million are still looking for work.Of those who do have jobs,5 million are working part time but would like to work full time,and the remaining 10 million are working full time.What is this country's unemployment rate?

A)10%
B)16.7%
C)25%
D)40%

Question 20

What is the term for workers who have given up looking for a job but would still like one?

A) jobless workers
B) discouraged workers
C) laid off workers
D) discarded workers

Question 21

Which of the following is the best example of frictional unemployment?

A) John,a coal miner,was laid off because of a lack of demand for workers in his industry.He is looking into new opportunities in computer programming,but they require him to gain some new skills.
B) Heather recently graduated with her doctorate in economics.She is searching for a job that matches her skills.
C) Peter,a highly skilled construction worker,lost his job when the recession began.He is looking for work,but demand in the construction industry is still low.
D) Allison,a recent high school graduate with high aspirations,is seeking a job as the CEO of a Fortune 500 company.

Question 22

During a typical nonrecession year,the duration for at least half of the unemployed is:

A) less than 1 week.
B) less than 14 weeks.
C) between 15 and 26 weeks.
D) more than 27 weeks.

Question 23

When not in a recession,the largest fraction of unemployment in the United States lasts:

A) less than 5 weeks.
B) between 5 and 14 weeks.
C) between 15 and 26 weeks.
D) more than 27 weeks.

Question 24

The causes of frictional unemployment include:

A) the business cycle.
B) the scarcity of information.
C) changes of economic structure.
D) labor unions.

Question 25

Creative destruction occurs at the level of the:

A) firm.
B) industry.
C) entire economy.
D) firm,industry,and entire economy.

Question 26

Frictional unemployment is caused by:

A) creative destruction.
B) recessions.
C) the transformation of the United States into a service economy.
D) the changing seasons of the year.

Question 27

Someone who recently moved to Florida because of its warmer climate will need to spend some time looking for a new job.This is an example of:

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

Question 28

Frictional unemployment is best defined as:

A) long-term unemployment caused by changing features of an economy.
B) short-term unemployment caused by difficulties of matching employees to employers.
C) unemployment caused by cyclical conditions of an economy.
D) a normal level of unemployment caused by high wages.

Question 29

Which type of unemployment is an outcome of economist Joseph Schumpeter's "creative destruction" process within an industry?

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

Question 30

What is one of the causes of frictional unemployment?

A) uneducated work force
B) willingness to take lower level jobs
C) scarcity of information
D) overabundance of job vacancies

Question 31

Following the great recession in 2010,the largest fraction of unemployment in the United States had lasted:

A) less than 5 weeks.
B) between 5 and 14 weeks.
C) between 15 and 26 weeks.
D) more than 27 weeks.

Question 32

Which of the following is a case of frictional unemployment?

A) Timothy is looking for a job where he can apply his expertise in computer programming.
B) Terrance is one of more than a dozen applicants for a position teaching high school math.
C) Tina was laid off temporarily while her company downsized.
D) Thomas recently quit his job to start his own business.

Question 33

The short-term unemployment caused by the ordinary difficulties of matching employee to employer is called:

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

Question 34

In a nonrecession year,the majority of U.S.unemployment is:

A) frictional.
B) structural.
C) cyclical.
D) recurrent.

Question 35

Several years ago,the rising popularity of Barnes & Noble and Borders shifted workers from independent bookshops to larger chains.What type of unemployment was associated with this reallocation of the work force?

A) frictional unemployment
B) technological substitution
C) creative destruction
D) structural unemployment

Question 36

Which of the following is TRUE of frictional unemployment?

A) It arises as a result of too much market competition.
B) It has a short duration.
C) It is a result of the minimum wage law.
D) It rises in a recession.

Question 37

Oil shocks,the shift from manufacturing to service jobs,and the use of new technologies are reasons for _____ unemployment.

A) frictional
B) cyclical
C) structural
D) permanent

Question 38

Frictional unemployment is:

A) short-term unemployment due to the normal difficulties of matching employers and employees.
B) persistent and long-term unemployment caused by shocks that make it more difficult for workers to find jobs.
C) long-term employment caused by a mismatch between the skills workers possess and the skills that the market is looking to hire.
D) unemployment due to fluctuations in the business cycle.

Question 39

The persistent,long-term unemployment caused by long-lasting shocks or permanent features of an economy is called:

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

Question 40

The most likely influence of the Internet on the rate of frictional unemployment has been to:

A) raise it.
B) lower it.
C) have no effect on it.
D) have an unpredictable effect on it.

Question 41

Which of the following is a case of structural unemployment?

A) Aaron is leaving his job to take a higher-paying position.
B) Amanda has been searching over a year for a position working as a travel agent.
C) Ashley took an early retirement package.
D) Alfred is searching for a position in which his expertise in criminal forensics can be used.

Question 42

Which of the following programs could help overcome structural unemployment?

A) worker retraining
B) limitations to unemployment benefits
C) job-search assistance programs
D) worker retraining,limiting unemployment benefits,and job-search assistance

Question 43

If employers can fire an employee for any reason,other things being equal:

A) it will be easier for job seekers to find employment.
B) it will be more difficult for job seekers to find employment.
C) the long-term unemployment rate will be higher.
D) labor markets will be less flexible and dynamic.

Question 44

Structural unemployment is associated with:

A) higher rates of output.
B) lower levels of stress.
C) higher levels of happiness.
D) higher rates of suicide.

Question 45

Active labor market policies:

A) cause riots in France.
B) enforce collective bargaining over wages,benefits,and working conditions.
C) state that an employee may quit and an employer may fire an employee at any time and for any reason.
D) focus on getting unemployed workers back to work.

Question 46

When it occurs at the industry level,Joseph Schumpeter's "creative destruction" results in:

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

Question 47

Europe has unemployment that is more persistent and longer in duration than unemployment in the United States.This suggests that Europe has higher:

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

Question 48

Which of the following is NOT true of structural unemployment?

A) It is persistent over time.
B) It is long-term in duration.
C) It results from industry restructuring.
D) It results from scarcity of information.

Question 49

A worker repairing VHS cassette-tape players was laid off because most of his customers have started using DVD players.This worker is now:

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

Question 50

Long-lasting unemployment benefits tend to:

A) increase the rate of structural unemployment.
B) decrease the rate of structural unemployment.
C) increase the rate of frictional unemployment.
D) decrease the rate of frictional unemployment.

Question 51

Minimum wage laws and unions tend to:

A) lower wages and raise unemployment.
B) raise wages and raise unemployment.
C) lower wages and lower unemployment.
D) raise wages and lower unemployment.

Question 52

The shift toward more of a service economy and less of a manufacturing economy in the United States has caused an increase in:

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

Question 53

Compared to the United States,unemployment rates in Western Europe tend to be:

A) lower because of more labor regulations.
B) lower because of fewer labor regulations.
C) higher because of more labor regulations.
D) higher because of fewer labor regulations.

Question 54

Which of the following does NOT contribute directly to the persistence of structural unemployment?

A) unemployment benefits
B) unions
C) employment protection laws
D) work tests

Question 55

Structural unemployment is a bigger problem in Europe than in the United States because of:

A) technological differences.
B) labor market regulations.
C) oil prices.
D) drug use.

Question 56

Over the past few decades,the U.S.economy has switched from a primarily manufacturing economy to a service economy.Many individuals working in manufacturing positions lost their jobs,and many new jobs opened up in services.For those who lost jobs in manufacturing,this is an example of:

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

Question 57

Structural unemployment is:

A) caused by the ordinary difficulties of matching employee to employer.
B) caused by long-lasting shocks or changes in permanent features of an economy.
C) unemployment correlated with the business cycle.
D) natural unemployment.

Question 58

The phrase "persistent long-term unemployment" means:

A) that a substantial fraction of the unemployed have been so for more than one year.
B) that the unemployment problem has lasted for a long time.
C) that a substantial fraction of the unemployed have been so for more than one year and that this problem has lasted for a long time.
D) that a small fraction of the unemployed have been so for more than one year but that this problem has not lasted for a long time.

Question 59

Higher levels of unemployment benefits and employment protection:

A) raise structural unemployment.
B) lower structural unemployment.
C) raise cyclical unemployment.
D) lower cyclical unemployment.

Question 60

Structural unemployment is caused by:

A) job rationing.
B) the time that it takes to match workers and jobs.
C) periodic declines in business activity that give rise to an inadequate demand for workers in the economy.
D) long-lasting shocks to permanent features of an economy that make it more difficult for some workers to find jobs.

Question 61

Which of the following elements reduces structural unemployment?

A) the enhancement of worker retraining programs
B) the extension of unemployment benefits
C) the growth of labor unions
D) the existence of employment protection laws

Question 62

If the equilibrium wage is $9 in the market for hotel workers and $8 in the market for restaurant workers and both markets have similar elasticities of labor supply and demand,then a minimum wage of $10 in both markets will:

A) cause more unemployment among hotel workers than restaurant workers.
B) cause more unemployment among restaurant workers than restaurant workers.
C) cause the same amount of unemployment in both markets.
D) have no effect in either market.

Question 63

_____ reduce the quantity of labor demanded.

A) Minimum wages only
B) Union wages only
C) Both minimum wages and union wages
D) Neither minimum wages nor union wages

Question 64

Which of the following elements increases structural unemployment?

A) active labor market policies
B) bonuses for early employment
C) job-search assistance programs
D) employment protection laws

Question 65

Use the following to answer questions
Figure: Labor Market
(Figure: Labor Market)Refer to the figure.What is the number of people who are employed at the market wage? How many people end up unemployed due to the implementation of a $10 minimum wage?

A) 40;20
B) 40;40
C) 60;40
D) 60;20

Question 66

(Figure: Labor Supply and Demand)Refer to the figure.How much will the quantity of labor employed decline as a result of the labor union's action to increase its wage demands to $11 an hour?

A) 700
B) 1,100
C) 1,800
D) 2,700

Question 67

Use the following to answer questions
Figure: Labor Market
(Figure: Labor Market)Refer to the figure.What is the unemployment rate in this market as a result of the implementation of a $10 minimum wage?

A) 20%
B) 25%
C) 50%
D) 100%

Question 68

Structural unemployment is more persistent in France than in the United States because:

A) French workers have less incentive to quickly seek a new position since their unemployment benefits are much higher.
B) France's labor regulations require a mandatory waiting period before a worker can reapply for a new job.
C) American workers have many more job opportunities than French workers.
D) labor unions are weaker in France than they are in the United States.

Question 69

(Figure: Labor Supply and Demand)Refer to the figure.What is the quantity of labor that is unemployed as a result of the labor union's action to increase its wage demands to $11 an hour?

A) 700
B) 1,100
C) 1,800
D) 2,700

Question 70

Which of the following does NOT raise structural unemployment?

A) higher union membership
B) more unemployment benefits
C) higher minimum wages
D) active labor market policies

Question 71

If the median wage is $9 in country X and $8 in country Y and both countries have similar elasticities of labor supply and demand,then a minimum wage of $4 in both countries will tend to:

A) make unemployment higher in country X than in country Y.
B) make unemployment higher in country Y than in country X.
C) make unemployment the same in both countries.
D) have no effect in either country.

Question 72

If a national government improves its unemployment benefits,its unemployment rate will most likely:

A) increase.
B) decrease.
C) remain the same.
D) follow the global trend,regardless of national policy.

Question 73

Which of the following best describes the effects of a major labor union that maintains a union wage above the market wage?

A) The quantity of labor demanded exceeds the quantity of labor supplied,and the unemployment rate increases.
B) The quantity of labor demanded exceeds the quantity of labor supplied,and the unemployment rate decreases.
C) The quantity of labor supplied exceeds the quantity of labor demanded,and the unemployment rate increases.
D) The quantity of labor supplied exceeds the quantity of labor demanded,and the unemployment rate decreases.

Question 74

An increase in unemployment benefits tends to:

A) lower the incentive to search for a job and raise structural unemployment.
B) lower the incentive to search for a job and lower structural unemployment.
C) raise the incentive to search for a job and raise structural unemployment.
D) raise the incentive to search for a job and lower structural unemployment.

Question 75

If the equilibrium wage is $9 in the market for hotel workers and $8 in the market for restaurant workers and both markets have similar elasticities of labor supply and demand,then a minimum wage of $4 in both markets will:

A) cause more unemployment among hotel workers than restaurant workers.
B) cause more unemployment among restaurant workers than restaurant workers.
C) cause the same amount of unemployment in both markets.
D) have no effect in either market.

Question 76

Higher unemployment benefits tend to:

A) increase the unemployment rate.
B) reduce the unemployment rate.
C) have no impact on the unemployment rate.
D) have an unpredictable impact on the unemployment rate.

Question 77

Countries in Western Europe have:

A) higher minimum wages than the United States.
B) higher median wages than the United States.
C) higher unemployment rates than the United States.
D) higher minimum wages,higher median wages,and higher unemployment than the United States.

Question 78

A minimum wage is:

A) an employment protection law.
B) a labor market price ceiling.
C) the equilibrium wage in an unskilled labor market.
D) a labor market price floor.

Question 79

Which of the following tends to increase unemployment?

A) unemployment benefits
B) minimum wages
C) labor unions
D) unemployment benefits,minimum wages,and labor unions

Question 80

Legal and cultural issues contribute significantly to what category of unemployment?

A) structural
B) cyclical
C) short-term
D) frictional