Deck 9: Unemployment and the Labor Market

Question 1

For economic purposes in the United States, the working-age population does not include:

A) anyone in the military.
B) someone who is 16 and does not want to work.
C) someone who is 65.
D) anyone without a driver's license.

Answer 1

anyone in the military.

Question 2

Unemployment:

A) changes primarily because of macroeconomic forces.
B) can have serious social consequences.
C) can create uncertainty about the future.
D) All of these are true.

Answer 2

All of these are true.

Question 3

The unemployment rate tells us:

A) what percentage of the labor force want to work and can't find a job.
B) who is being affected by the fluctuations of the economy.
C) how to solve the problem of unemployment.
D) what portion of the population is causing the economy to languish.

Answer 3

what percentage of the labor force want to work and can't find a job.

Question 4

Unemployment rates tend to be highest during periods of:

A) recession.
B) economic boom.
C) recovery.
D) static movement.

Question 5

In the United States, the working-age population refers to the:

A) civilian, noninstitutional population aged 16 and over.
B) population of those aged 16 and over.
C) civilian, noninstitutional population of those between age 16 and age 64.
D) noninstitutional population of those between ages 16 and 64.

Question 6

In general, the unemployment rate does not vary greatly by:

A) educational status.
B) gender.
C) age.
D) height

Question 7

Unemployment occurs when someone:

A) wants to work but cannot find a job.
B) is not working full-time.
C) should be working but chooses not to.
D) has useful skills that are not being used.

Question 8

In the United States, to count as unemployed, you must:

A) be younger than 65 years old.
B) actively looking for work.
C) be skilled enough to hold a job.
D) All of these are true.

Question 9

We may note that unemployment:

A) exists at any time during the business cycle.
B) only occurs during times of recession.
C) is highest during times of economic booms.
D) tends to increase during times of economic recovery.

Question 10

Policies designed to protect workers:

A) include minimum wage laws.
B) include unionization laws.
C) can lead to unemployment.
D) All of these are true.

Question 11

For economic purposes in the United States, the working-age population does include people:

A) in prison.
B) in the military.
C) less than 16 years old.
D) over the age of 16.

Question 12

The labor force does not include people in the working-age population who are:

A) employed.
B) not actively trying to find a job.
C) retired, a full-time student, or stay-at-home parent.
D) employed part time.

Question 13

People with less education are:

A) more likely to be unemployed than people with more education.
B) less likely to be unemployed than people with more education.
C) just as likely to be unemployed than people with more education.
D) not comparable to people with more education.

Question 14

On average, younger people have:

A) higher unemployment rates than older people.
B) lower unemployment rates than older people.
C) similar unemployment rates than older people.
D) uncorrelated unemployment rates compared to those of older people.

Question 15

One consequence of unemployment is that:

A) some productive potential of the economy is being wasted.
B) the time and skills of the unemployed are not being put to use.
C) it can create uncertainty about the future.
D) All of these are consequences of unemployment.

Question 16

The government office in charge of collecting official employment statistics is the:

A) Bureau of Labor Statistics.
B) Bureau of Economic Analysis.
C) Bureau of Industry and Security.
D) Bureau of the Census.

Question 17

The unemployment rate tells us:

A) what percentage of the labor force wants to work and can't find a job.
B) who is currently unemployed.
C) why the unemployed can't find work.
D) the number of people who really don't want to work.

Question 18

The unemployment rate:

A) is measured by the number of people who are unemployed divided by the labor force.
B) is never zero.
C) measures what percentage of our labor force is currently looking for a job and can't find one.
D) All of these are true.

Question 19

The labor force excludes those:

A) younger than age 16 years old.
B) who don't want to work.
C) who are disabled and can't work.
D) The labor force excludes all of these.

Question 20

During periods of recession unemployment:

A) is more common.
B) is less common.
C) is uncorrelated to periods of recession.
D) rates are the same for all groups of the working population.

Question 21

Matt is a college graduate who majored in creative writing and currently works at a local bookstore as a sales clerk. The best way to describe Matt is to say he is:

A) unemployed.
B) a discouraged worker.
C) underemployed.
D) overemployed.

Question 22

The labor force participation rate:

A) is measured by the labor force divided by the total population.
B) tells us what fraction of the working-age population wants to be working.
C) typically rises during periods of recession.
D) is measured by those employed divided by the working-age population.

Question 23

In 2015, the labor force participation rate was 62.6 percent. This means that:

A) 62.6 % of all working age people wanted a job.
B) there was 37.4 % unemployment.
C) 62.6 % of all working age people were employed.
D) only 62.4 percent of labor force was in working age population.

Question 24

The Bureau of Labor Statistics collects _______ measures of unemployment.

A) 4
B) 5
C) 6
D) 7

Question 25

Sonia has a BAin art history, and is currently working full-time as a waitress. The Bureau of Labor Statistics would count Sonia as:

A) employed.
B) underemployed.
C) unemployed.
D) a discouraged worker.

Question 26

The unemployment rate may:

A) understate the effect of a recession on employment because some leave the labor force.
B) understate the effect of a recession on employment because many enter the labor force.
C) overstate the effect of a recession on employment because some leave the labor force.
D) overstate the effect of a recession on employment because many enter the labor force.

Question 27

Jen has a PhD in economics and has been working for 3 years part-time as an instructor; she has always hoped to be hired as a full-time faculty member. The best way to describe Jen is to say she is:

A) a discouraged worker.
B) unemployed.
C) underemployed.
D) overemployed.

Question 28

John earned a PhD in biomedical engineering, and works full-time as a faculty member at the local university. He also does some private consulting work on the side. He would like to give up teaching and do consulting full-time, but he fears there isn't enough demand for it. The best way to describe John is to say he is:

A) a discouraged worker.
B) underemployed.
C) overemployed.
D) employed.

Question 29

Economists report changes in unemployment in:

A) percentage points, not percentages.
B) percentages, not percentage points.
C) percentage points or percentages, interchangeably.
D) nominal figures; they rarely use percentages or percentage point changes.

Question 30

Discouraged workers are people who have:

A) looked for work in the past year but have given up looking because of the condition of the labor market.
B) not looked for work in the past year but would take a job if one was offered to them.
C) looked for work in the past year but decided to leave the labor market to go back to school, retire, or be a stay-at-home parent.
D) not looked for work in over a year because of the condition of the labor market.

Question 31

During times of recession, the labor force participation rate typically:

A) rises, as more people need work.
B) rises, as more incomes per household are needed to make ends meet.
C) falls, as more people give up and stop looking for work.
D) falls, as more people cannot find work, they stay in jobs that aren't a good fit.

Question 32

Someone who is underemployed is someone who:

A) is working part-time, but wants full-time employment.
B) is working in a job for which he is overqualified.
C) could be contributing more output to society by either working more, or by working using more advanced skills he possesses but doesn't currently use.
D) All of these describe someone who is underemployed.

Question 33

If you hear that unemployment increased in the last year by 3.5 percentage points to 8 %it means:

A) 35 out of every 100 people lost their job in the last year.
B) 35 out of every 1,000 people lost their job in the last year.
C) 8 out of every 1,000 people who want a job can't find one.
D) 80 out of every 100 people who want a job can't find one.

Question 34

The labor force participation rate:

A) tells us what fraction of the working-age population wants to be working, whether or not they actually have a job.
B) typically rises during times of recession, as more people need work.
C) is used as an indication of the health of the overall economy.
D) All of these are true.

Question 35

Marc is a high school graduate and currently works as a corrections officer at a local prison. He would like to go back to school to train to become a police officer someday. The best way to describe Marc is to say he is:

A) a discouraged worker.
B) unemployed.
C) underemployed.
D) employed.

Question 36

The Bureau of Labor Statistics counts underemployed persons as those who are currently working:

A) less than they would like to be.
B) in a job for which they are overqualified for.
C) less hours than their employer requires full-time workers to work.
D) in a field that doesn't add a lot to overall GDP.

Question 37

If you hear that unemployment decreased by 2 percentage points to 6 %in the past year, while the labor force participation rate remained constant, it means:

A) on a net basis, 2 out of every 10 people lost their job in the last year.
B) on a net basis, 20 out of every 1,000 unemployed persons found a job in the last year.
C) on a net basis, 2 out of every 100 people lost their job in the past year.
D) on a net basis, 4 out of every 100 unemployed persons found a job in the last year.

Question 38

If you hear that unemployment increased by 2 percentage points to 4 %in the past year, while the labor force participation rate and the population remained constant, it means:

A) unemployment doubled in the past year.
B) there was a 100 percent increase in unemployment.
C) twice as many people are without work than was the case a year ago.
D) All of these are true.

Question 39

Sasha has a master's degree in writing, and currently works full-time as a 2^nd grade classroom helper. She submits articles for the local paper on occasion, and gets paid only when the editor agrees to publish a submission. Sasha would love to be a full-time reporter. The best way to describe Sasha is to say she is ________________; the Bureau of Labor Statistics would count Sasha as ____________.

A) underemployed; employed
B) employed; employed
C) discouraged; underemployed
D) underemployed; underemployed

Question 40

Some people drop out of the labor force during times of recession:

A) to go back to college, because the opportunity cost is lower during a recession.
B) because they cannot find work and give up trying.
C) and decide to take early retirement.
D) All of these are true.

Question 41

The labor demand curve:

A) shows the relationship between the total quantity of labor demanded by all the firms in the economy and the wage rate.
B) shows that, all things being equal, firms will want to hire more labor when wages are lower and less labor when wages are higher.
C) has a negative slope.
D) All of these are true.

Question 42

Jake just quit his job as a shoe salesman and is looking for work as an accountant, which is what his college degree is in. Jake would be considered:

A) frictionally unemployed.
B) structurally unemployed
C) cyclically unemployed.
D) Jake is not in the labor force.

Question 43

Which type of unemployment does not contribute to the natural rate of unemployment?

A) Frictional
B) Structural
C) Real-wage
D) Cyclical

Question 44

The normal level of unemployment that persists in an economy in the long run is:

A) called the natural rate of unemployment.
B) also called the equilibrium rate of underemployment.
C) zero when the market is equilibrium.
D) always achieved in the real world.

Question 45

The labor supply curve:

A) is made up of firms who want to hire workers at each given wage.
B) is made up of workers who want to work for firms at each given wage.
C) shows number of firms who are willing and able to hire workers at each given wage.
D) shows that the number of firms who want to hire workers decreases as the wage increases.

Question 46

The natural rate of unemployment:

A) is typically zero.
B) is the normal level of unemployment in an economy in the long run.
C) is constant over time.
D) None of these is true.

Question 47

The equilibrium price of labor is called:

A) the wage.
B) income, plus benefits.
C) opportunity cost.
D) the leisure trade-off.

Question 48

Real-wage unemployment is:

A) a mismatch between the skills workers can offer and the skills that are in demand.
B) unemployment caused by workers who are changing their location, job, or career.
C) the effect of wages remaining persistently above the market-clearing level.
D) also called cyclical unemployment.

Question 49

The labor demand curve:

A) is provided by firms who want to hire workers at each given wage.
B) is made up of workers who want to work for firms at each given wage.
C) shows number of workers who are willing and able to work at higher wages.
D) shows that the number of people who want to work increases as the wage increases.

Question 50

Johnny has been working in a sandwich shop full-time while he attends college. When he graduates, he quits the sandwich shop and begins to search for full-time employment related to his college degree. Johnny would be considered:

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

Question 51

The survey the Bureau of Labor Statistics uses to collect unemployment data is called the:

A) current population survey.
B) census population survey.
C) census employment survey.
D) current employment survey.

Question 52

Which type of unemployment leads to a natural rate of unemployment above zero?

A) The natural rate of unemployment is always zero.
B) Frictional unemployment
C) Unemployment of government workers
D) Cyclical unemployment

Question 53

The Bureau of Labor Statistics measures unemployment by surveying:

A) every household at least once a year.
B) a sample of about 60,000 households every month.
C) a sample of about 60,000 employers every month.
D) every business at least once a year.

Question 54

Which type of unemployment contributes to the natural rate of unemployment?

A) Real-wage unemployment
B) Cyclical unemployment
C) Unemployment of government workers.
D) All of these contribute to the natural rate.

Question 55

The labor supply curve:

A) shows the relationship between the total quantity of labor supplied by all firmsin the economy and the wage rate.
B) shows that, all things being equal, more workers will want to work when wages are higher and less will want to work when wages are lower.
C) has a negative slope.
D) All of these are true.

Question 56

Structural unemployment is:

A) a mismatch between the skills workers can offer and the skills that are in demand.
B) unemployment caused by workers who are changing their location, job, or career.
C) the effect of wages remaining persistently above the market-clearing level.
D) when workers voluntarily quit their jobs.

Question 57

Frictional unemployment is:

A) a mismatch between the skills workers can offer and the skills that are in demand.
B) unemployment caused by workers who are changing their location, job, or career.
C) the effect of wages remaining persistently above the market-clearing level.
D) the most alarming cause of unemployment.

Question 58

When the prevailing market wage is above equilibrium:

A) the surplus of labor is the amount of unemployment in the market.
B) the difference between the quantity supplied and the quantity of labor demanded is unemployment.
C) unemployment occurs.
D) All of these are true.

Question 59

When the prevailing market wage is above equilibrium, we say:

A) there is no unemployment.
B) there is a surplus of labor.
C) the quantity of labor demanded is more than the quantity supplied.
D) All of these are true.

Question 60

If we wanted to describe unemployment in terms of supply and demand, we could say:

A) there is a surplus of labor.
B) at the prevailing wage, the demand is greater than the supply of labor.
C) the quantity of those demanding labor is greater than those supplying labor.
D) All of these are true.

Question 61

One way for governments to try and minimize the effects of structural unemployment is to:

A) provide information to unemployed people about which professions are experiencing rising demand for labor.
B) subsidize retraining programs for unemployed workers to learn new skills.
C) offer low-interest loans to unemployed workers to go back to school to learn new skills.
D) All of these are ways the government can deal with structural unemployment.

Question 62

Carol is a coal miner who just got laid off when the last coal mine in the area was shut down. She has looked everywhere for another job as a miner, but cannot find one. Given that Carol is unlikely to find another job as a miner, she would be considered:

A) frictionally unemployed.
B) structurally unemployed.
C) real-wage unemployed.
D) Carol is a discouraged worker.

Question 63

When the economy is going strong the:

A) demand for workers increases.
B) supply of workers increases.
C) demand for workers decreases.
D) supply of workers decreases.

Question 64

Sue just quit her job as a librarian to pursue her lifelong dream of getting a job as a teacher. Sue would be considered:

A) frictionally unemployed.
B) structurally unemployed.
C) seasonally unemployed.
D) Sue is not in the labor force.

Question 65

Don worked as a machinist all his life, and was recently laid off because his plant closed and the jobs were outsourced to India. There don't seem to be any machinist jobs in the area anymore. Don would be considered:

A) frictionally unemployed.
B) structurally unemployed.
C) real-wage unemployed.
D) Don is a discouraged worker.

Question 66

When the economy slows down the:

A) demand for workers increases.
B) supply of workers increases.
C) demand for workers decreases.
D) supply of workers decreases.

Question 67

Bob just graduated from college and has just landed his first job with a local accounting firm that will start in three months. Bob plans to use that time to find a place to live, and adjust to the new area. Bob would be considered:

A) frictionally unemployed.
B) employed.
C) structurally unemployed.
D) Bob is not in the labor force.

Question 68

Sonia was a great bookkeeper 20 years ago, then left the workforce to stay home and raise her children. Now that they're in college, Sonia looks for another bookkeeping job, but they all require computer skills that she doesn't have. Sonia would be considered:

A) frictionally unemployed.
B) structurally unemployed.
C) Sonia is not in the labor force..
D) seasonally unemployed.

Question 69

Real-wage unemployment can be caused by which of the following?

A) Minimum wage laws
B) Retraining programs
C) Low-interest student loans
D) None of these cause real-wage unemployment.

Question 70

When governments provide information to unemployed people about which professions are experiencing rising demand for labor, they are trying to minimize the effects of which kind of unemployment?

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

Question 71

The business cycle matters for unemployment because:

A) it affects the demand for labor.
B) it affects the supply of labor.
C) Both of these are true.
D) Neither of these is true.

Question 72

When the economy is going strong:

A) firms expand their operations.
B) demand for workers decreases.
C) GDP growth is negative.
D) firms tend to lay off workers.

Question 73

Cyclical unemployment is:

A) unemployment caused by short-term economic fluctuations reflected in GDP growth.
B) unemployment resulting from a mismatch between the skills workers can offer and the skills demanded.
C) unemployment caused by workers who are changing their location, job, or career.
D) the effect of wages remaining persistently above the market-clearing level.

Question 74

When the economy goes through ups and downs over time:

A) it is not reflected by changes in GDP growth.
B) economists call this pattern the business cycle.
C) it affects the supply of labor.
D) All of these are true.

Question 75

Fred was working as a sales rep for a firm, and just completed an MBA by taking courses at night. Fred quits his job to pursue a management position. Fred would be considered:

A) underemployed.
B) frictionally unemployed.
C) structurally unemployed.
D) classically unemployed.

Question 76

One way for governments to try and minimize the effects of structural unemployment is to:

A) subsidize retraining programs.
B) increase unemployment benefits.
C) mandate employers cannot fire anyone.
D) All of these are ways that would minimize the effects of structural unemployment.

Question 77

Classical unemployment can be caused by which of the following?

A) Minimum wage laws
B) Bargaining by unions
C) Efficiency wages
D) All these create classical unemployment.

Question 78

When governments subsidize retraining programs for unemployed workers to learn new skills, they are trying to minimize the effects of which kind of unemployment?

A) Frictional
B) Structural
C) Seasonal
D) Real-wage

Question 79

Sarah used to be a music teacher at a local school, but got let go last year due to budget cuts. Sarah now works part-time as a waitress while looking for another teaching job. Sarah would be considered:

A) frictionally unemployed.
B) underemployed.
C) structurally unemployed.
D) real-wage unemployed.

Question 80

When the economy slows down:

A) firms contract their operations.
B) demand for workers decreases.
C) GDP growth is slowing or negative.
D) All of these are true.