Question 1

The natural rate of unemployment

Accepted Answer

The natural rate of unemployment is not fixed and can be affected by demographic changes such as changes in the age structure of the labor force or changes in the level of education of the workforce. It is not determined solely by business cycles and does not always increase over time.

Question 2

Consider the following: A country's frictional unemployment rate is 3%, the natural unemployment rate is 5.5%, and the cyclical unemployment rate is 2.4%.Calculate the structural unemployment rate and the unemployment rate.

Accepted Answer

The natural unemployment rate is the sum of frictional and structural unemployment rates. Therefore, structural unemployment rate = 5.5% - 3% = 2.5%. The total unemployment rate is the sum of natural and cyclical unemployment rates: 5.5% + 2.4% = 7.9%.

Question 3

The natural rate of unemployment

Accepted Answer

The natural rate of unemployment is the sum of frictional and structural unemployment, as these are considered to be the "natural" or inherent types of unemployment in an economy. It does not include cyclical unemployment, which is caused by fluctuations in the business cycle. The natural rate of unemployment may increase during a recession, but this is due to an increase in cyclical unemployment, not the natural rate itself. It is also possible for the natural rate of unemployment to be equal to or greater than the full employment rate of unemployment, depending on the specific labor market conditions in an economy.

Question 4

Consider the following: A country's structural unemployment rate is 3.2%, the natural unemployment rate is 5.6%, and the cyclical unemployment rate is 4.7%.Calculate the frictional unemployment rate and the unemployment rate.

Accepted Answer

The natural unemployment rate is the sum of structural and frictional unemployment rates. Thus, frictional unemployment rate = 5.6% - 3.2% = 2.4%. The total unemployment rate is the sum of natural and cyclical unemployment rates: 5.6% + 4.7% = 10.3%.

Question 5

A number of semi-skilled workers in an industry find themselves out of work when improvements in technology render their jobs obsolete.These workers experience

Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills and qualifications of workers and the requirements of available jobs. This is often caused by changes in technology or shifts in the structure of the economy. In this case, the semi-skilled workers are losing their jobs due to technological advancements, which means there is a structural mismatch between their skills and the requirements of available jobs. Therefore, choice C, structural unemployment, is the best answer.

Question 6

Which of the following is an example of frictional unemployment?

Accepted Answer

Frictional unemployment occurs when individuals are temporarily unemployed while transitioning between jobs or entering the workforce. In this case, the real estate agent is voluntarily leaving one job to search for another, fitting the definition of frictional unemployment.

Question 7

Which of the following is an example of cyclical unemployment?

Accepted Answer

Cyclical unemployment is caused by fluctuations in the business cycle. When there is a decline in sales, companies may reduce their workforce and temporarily lay off workers. Therefore, an autoworker who is temporarily laid off from an automobile company due to a decline in sales is an example of cyclical unemployment. The other choices are examples of different types of unemployment such as technological unemployment, frictional unemployment, and structural unemployment.

Question 8

If the population of the United States is 260 million, the labor force is 130 million, and 120 million workers are employed, the rate of unemployment is

Accepted Answer

The unemployment rate is calculated as the number of unemployed individuals divided by the labor force, multiplied by 100. Here, 10 million are unemployed (130 million labor force - 120 million employed), so the unemployment rate is (10/130) * 100 = 7.7%.

Question 9

Which of the following would tend to increase the natural rate of unemployment?

Accepted Answer

The answer of Which of the following would tend to...

Question 10

People who are in the process of changing jobs are counted as

Accepted Answer

People who are in the process of changing jobs and are temporarily without work are considered frictionally unemployed. This type of unemployment occurs due to the natural frictions or time delays in the job search process.

Question 11

Which of the following is a source of frictional unemployment?

Accepted Answer

Frictional unemployment occurs when workers are between jobs or are searching for new ones. This can happen because of personal choices, such as leaving one job to search for a better one, or because of external factors, such as relocating to a new area. The time it takes to search for the right job is a common cause of frictional unemployment.

Question 12

The BLS recently reported that there are 45.06 million people over age 16 who have completed a college education.Of this number 36.21 million are in the labor force and 35.44 are employed.What is the unemployment rate for this group?

Accepted Answer

The unemployment rate can be calculated as (unemployed/labor force) x 100.

From the given information, we know that:

- The number of employed individuals = 35.44 million
- The number of individuals in the labor force = 36.21 million

To calculate the number of unemployed individuals, we can subtract the number of employed individuals from the labor force, as follows:

Unemployed individuals = Labor force - Employed individuals
Unemployed individuals = 36.21 million - 35.44 million
Unemployed individuals = 0.77 million

Now, we can calculate the unemployment rate:

Unemployment rate = (Unemployed/Labor force) x 100
Unemployment rate = (0.77/36.21) x 100
Unemployment rate = 2.13%

Therefore, the best choice is C, 2.13%.

Question 13

Cyclical unemployment

Accepted Answer

Cyclical unemployment occurs during periods of economic downturns or recessions when there is a decrease in demand for goods and services, leading to a reduction in the workforce.

Question 14

The economy is booming.GDP is growing at a rate of 6% per year, well above the average growth rate.Under these circumstances, which of the following types of unemployment is likely to have a rate less than or equal to zero?
I.Frictional unemployment
II.Cyclical unemployment
III.Structural unemployment

Accepted Answer

Cyclical unemployment is related to the economic cycle. During a booming economy, cyclical unemployment tends to be very low or even zero, as there are more jobs available and fewer layoffs.

Question 15

The natural level of employment occurs if there is no

Accepted Answer

The natural level of employment occurs when there is no cyclical unemployment, meaning the economy is at full employment with only frictional and structural unemployment present.

Question 16

Which of the following is an example of structural unemployment?

Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills of the workforce and the available job openings. In this case, the new technological advance has made the geologist's skills obsolete, leading to a permanent loss of their job.

Question 17

If a nation liberalizes its immigration laws and receives a significant influx of young workers,

Accepted Answer

An influx of young workers due to liberalized immigration laws would increase the size of the labor force, leading to an increase in the potential output of an economy. This increased supply of labor would tend to push down wages, which in turn would lower the cost of hiring workers for firms. Lower labor costs would incentivize firms to increase employment, leading to a decrease in the natural rate of unemployment.

Question 18

Welfare reforms enacted in 1996 put more pressure on welfare recipients to look for work.The new law mandated cutting off benefits after a certain length of time.Which of the following is likely to occur as a result of this provision?

Accepted Answer

The answer of Welfare reforms enacted in 1996 put more...

Question 19

The natural rate of unemployment
I.includes frictional and structural unemployment.
II.is equal to zero when an economy is producing at a point on its production possibilities frontier.
III.is the unemployment rate that exists when the quantity of labor demanded is equal to the quantity of labor supplied.

Accepted Answer

The natural rate of unemployment includes frictional and structural unemployment (I), but it is not zero when an economy is producing on its production possibilities frontier (II) because there can still be frictional and structural unemployment even when the economy is operating at full capacity. The natural rate of unemployment is the unemployment rate that exists when the quantity of labor demanded is equal to the quantity of labor supplied (III). Therefore, options I and III are correct, and option II is not.

Question 20

Unemployment that results from a mismatch between worker qualifications and the characteristics employers require is called _________ unemployment.

Accepted Answer

Structural unemployment occurs because of a mismatch between the skills that workers in the economy can offer and the skills demanded by employers in the job market. It is a long-term and persistent unemployment that is not affected by business cycles.

Quiz 20: Macroeconomics: the Big Picture

The natural rate of unemployment

Consider the following: A country's frictional unemployment rate is 3%, the natural unemployment rate is 5.5%, and the cyclical unemployment rate is 2.4%.Calculate the structural unemployment rate and the unemployment rate.

The natural rate of unemployment

Consider the following: A country's structural unemployment rate is 3.2%, the natural unemployment rate is 5.6%, and the cyclical unemployment rate is 4.7%.Calculate the frictional unemployment rate and the unemployment rate.

A number of semi-skilled workers in an industry find themselves out of work when improvements in technology render their jobs obsolete.These workers experience

Which of the following is an example of frictional unemployment?

Which of the following is an example of cyclical unemployment?

If the population of the United States is 260 million, the labor force is 130 million, and 120 million workers are employed, the rate of unemployment is

Which of the following would tend to increase the natural rate of unemployment?

People who are in the process of changing jobs are counted as

Which of the following is a source of frictional unemployment?

The BLS recently reported that there are 45.06 million people over age 16 who have completed a college education.Of this number 36.21 million are in the labor force and 35.44 are employed.What is the unemployment rate for this group?

Cyclical unemployment

The natural level of employment occurs if there is no

Which of the following is an example of structural unemployment?

If a nation liberalizes its immigration laws and receives a significant influx of young workers,

Welfare reforms enacted in 1996 put more pressure on welfare recipients to look for work.The new law mandated cutting off benefits after a certain length of time.Which of the following is likely to occur as a result of this provision?

Unemployment that results from a mismatch between worker qualifications and the characteristics employers require is called _________ unemployment.