Question 1

A typical American worker covered by unemployment insurance receives
A)75 percent of his former wages for 26 weeks.
B)50 percent of his former wages for 26 weeks.
C)35 percent of his former wages for 39 weeks.
D)None of the above is correct.

Accepted Answer

A typical American worker covered by unemployment insurance receives 50 percent of his former wages for 26 weeks. However, the amount and duration of benefits may vary depending on state laws and individual circumstances.

Question 2

Sectoral shifts in demand for output
A)create structural unemployment.
B)immediately reduce unemployment.
C)increase unemployment due to job search.
D)on net leave unemployment unchanged.

Accepted Answer

The answer of Sectoral shifts in demand for output
A)create structural...

Question 3

Evidence from research studies by economists
A)show that increased unemployment benefits decrease the job-search efforts of the unemployed.
B)show that increased unemployment benefits have virtually no effect on the job-search efforts of the unemployed.
C)show that increased unemployment benefits increases the job-search effort of the unemployed.
D)find no clear-cut evidence on what increased unemployment benefits do to job-search efforts.

Accepted Answer

Research studies by economists generally indicate that increased unemployment benefits can decrease the job-search efforts of the unemployed, as the financial support may reduce the urgency to find new employment quickly.

Question 4

Which of the following is a cause of frictional unemployment?
A)the minimum wage
B)a worker leaving a job to find one with better benefits
C)labor unions
D)All of the above are correct.

Accepted Answer

Frictional unemployment is when workers voluntarily leave their jobs to search for better employment. The minimum wage and labor unions are not causes of frictional unemployment.

Question 5

People who are unemployed because of job search are best classified as
A)cyclically unemployed.
B)structurally unemployed.
C)frictionally unemployed.
D)discouraged workers.

Accepted Answer

People who are unemployed because of job search are best classified as frictionally unemployed. Frictional unemployment occurs when an individual is temporarily unemployed between jobs or looking for their first job. This type of unemployment is considered natural and a healthy part of a dynamic economy as it allows for movement and growth within the labor market.

Question 6

From time to time the demand for workers has risen in one region of the United States and fallen in another.This illustrates
A)frictional unemployment created by efficiency wages.
B)structural unemployment created by efficiency wages.
C)frictional unemployment created by sectoral shifts.
D)structural unemployment created by sectoral shifts.

Accepted Answer

The answer of From time to time the demand for...

Question 7

The Bureau of Labor Statistics predicts that the number of jobs for registered nurses will grow faster than most occupations while the number of jobs for telephone operators will decline.This change in the labor market could lead to
A)frictional unemployment created by a sectoral shift.
B)structural unemployment created by a sectoral shift.
C)frictional unemployment created by efficiency wages.
D)structural unemployment created by efficiency wages.

Accepted Answer

The answer of The Bureau of Labor Statistics predicts that...

Question 8

Providing training for unemployed individuals is primarily intended to reduce
A)frictional unemployment.
B)seasonal unemployment.
C)structural unemployment.
D)cyclical unemployment.

Accepted Answer

Providing training for unemployed individuals is primarily intended to reduce structural unemployment. Structural unemployment occurs when there is a mismatch between the skills that workers have and the skills that are in demand by employers. By providing training to individuals with outdated or irrelevant skills, they become better equipped to find employment in industries with job openings.

Question 9

Compared to the United States,Germany historically has had higher unemployment rates.One explanation for this difference could be
A)a very low minimum wage in German.
B)the relatively low expenditures of the German government..
C)the relatively high unemployment insurance in Germany.
D)the refusal of German firms to set wages according to efficiency wage theory.

Accepted Answer

The relatively high unemployment insurance in Germany may explain the historically higher unemployment rates compared to the United States. This is because generous unemployment insurance can create disincentives for individuals to actively search for work, leading to a higher level of unemployment.

Question 10

More generous unemployment insurance would
A)raise structural unemployment.
B)raise frictional unemployment.
C)lower structural unemployment.
D)lower frictional unemployment.

Accepted Answer

The answer of More generous unemployment insurance would
A)raise structural unemployment.
B)raise...

Question 11

Frictional unemployment can be the consequence of
A)workers leaving existing jobs to find ones they like better.
B)an industry declining while another is growing.
C)changes in the working conditions offered by competing firms.
D)All of the above are correct.

Accepted Answer

Frictional unemployment can occur due to any of the listed reasons, such as workers leaving jobs for better opportunities or changes in the industry's structure. Therefore, all of the above options are correct.

Question 12

Which of the following is not correct?
A)Frictional unemployment is inevitable in a dynamic economy.
B)Although the unemployment created by sectoral shifts is unfortunate, in the long run such changes lead to higher productivity and higher living standards.
C)At least 10 percent of U.S.manufacturing jobs are destroyed every year.
D)In a typical month more than 9 percent of workers leave their jobs.

Accepted Answer

In a typical month, the percentage of workers leaving their jobs is generally lower than 9 percent. The statement exaggerates the typical turnover rate.

Question 13

Suppose that because of a change in diets,bakeries need fewer workers and ranches and steak houses need more workers.This change would create
A)frictional unemployment.
B)structural unemployment.
C)both frictional and structural unemployment.
D)neither frictional unemployment nor structural unemployment.

Accepted Answer

The answer of Suppose that because of a change in...

Question 14

In the US an increase in the world price of oil would likely
A)decrease unemployment, and the decrease would be greater the more generous unemployment insurance benefits were.
B)decrease unemployment, but the decrease would be smaller the more generous unemployment insurance benefits were.
C)increase unemployment, and the increase would be greater the more generous unemployment insurance benefits were.
D)increase unemployment, but the increase would be smaller the more generous unemployment insurance benefits were.

Accepted Answer

An increase in the world price of oil can lead to higher production costs and reduced economic activity, potentially increasing unemployment. Generous unemployment benefits may prolong unemployment duration, leading to a greater increase in unemployment.

Question 15

Most economists would agree that eliminating unemployment insurance would
A)increase unemployment because people would quit jobs they thought were not secure.
B)increase unemployment because if the government didn't provide unemployment insurance, private firms would offer superior insurance.
C)reduce unemployment and so improve economic well-being.
D)reduce unemployment, but they disagree about whether economic well-being would be enhanced by such a change.

Accepted Answer

Eliminating unemployment insurance would likely reduce unemployment because it would incentivize people to find jobs more quickly. However, economists disagree on whether this would improve economic well-being, as unemployment insurance provides a safety net that can help maintain consumption and reduce poverty during job transitions.

Question 16

Unemployment insurance
A)reduces search effort and raises unemployment.
B)reduces search effort and lowers unemployment.
C)increases search effort and raises unemployment.
D)increases search effort and decreases unemployment.

Accepted Answer

Unemployment insurance provides financial support to individuals who have lost their jobs. This reduces the urgency and incentive for individuals to actively search for a job, as they have an alternative source of income. This leads to a reduction in search effort and an increase in unemployment, as individuals may delay accepting a job that is not ideal for them.

Question 17

Consumers decide to buy more computers and fewer typewriters.As a result,computer companies expand production while typewriter companies lay-off workers.This is an example of
A)structural unemployment created by efficiency wages.
B)cyclical unemployment created by a recession.
C)frictional unemployment created by a sectoral shift in demand.
D)None of the above is correct.

Accepted Answer

The change in demand from typewriters to computers represents a sectoral shift, which leads to frictional unemployment as workers need to transition into new jobs. The cyclical unemployment created by a recession would not be applicable in this scenario, and there is no indication that efficiency wages are a factor.

Question 18

Economists would predict that,other things the same,the more generous unemployment compensation a country has,
A)the shorter the duration of each spell of unemployment, and the higher the unemployment rate.
B)the shorter the duration of each spell of unemployment, and the lower the unemployment rate.
C)the longer the duration of each spell of unemployment, and the higher the unemployment rate.
D)the longer the duration of each spell of unemployment, and the lower the unemployment rate.

Accepted Answer

Economists have found that generous unemployment compensation can increase the duration of each spell of unemployment, as it provides a financial cushion that allows individuals to be choosier in their job search and wait for better job opportunities. This can result in a higher unemployment rate, as individuals are not quickly entering new jobs.

Question 19

In 2002,the demand for construction workers increased and the demands for textile and steel workers diminished.This illustrates
A)frictional unemployment created by a sectoral shift.
B)structural unemployment created by a sectoral shift.
C)frictional unemployment created by efficiency wages.
D)structural unemployment created by efficiency wages.

Accepted Answer

Frictional unemployment is caused by a temporary mismatch between the skills of workers and the demands of employers. Structural unemployment is caused by a permanent change in the economy that makes certain jobs obsolete. A sectoral shift is a change in the relative importance of different sectors of the economy. In this case, the demand for construction workers increased while the demand for textile and steel workers decreased. This is an example of a sectoral shift that has created frictional unemployment.

Question 20

The government operates programs for job training and job information intended to reduce unemployment.
A)Almost all economists agree that such programs are of no use.
B)Almost all economists agree that such programs work very well.
C)Some economists claim that the government can do these things no better than firms and individuals could do them for themselves.
D)None of the above is correct.

Accepted Answer

While there is some debate among economists, many argue that the government may not necessarily do a better job than private firms or individuals in providing job training and information. However, it is worth noting that not all economists agree on this issue, so option D cannot be correct. Option A is also incorrect, as there is evidence that suggests job training and information programs can be effective, although their impact may vary. Option B is overly optimistic and not widely supported by research.

Quiz 28: Unemployment

A typical American worker covered by unemployment insurance receives

Sectoral shifts in demand for output

Evidence from research studies by economists

Which of the following is a cause of frictional unemployment?

People who are unemployed because of job search are best classified as

From time to time the demand for workers has risen in one region of the United States and fallen in another.This illustrates

The Bureau of Labor Statistics predicts that the number of jobs for registered nurses will grow faster than most occupations while the number of jobs for telephone operators will decline.This change in the labor market could lead to

Providing training for unemployed individuals is primarily intended to reduce

Compared to the United States,Germany historically has had higher unemployment rates.One explanation for this difference could be

More generous unemployment insurance would

Frictional unemployment can be the consequence of

Which of the following is not correct?

Suppose that because of a change in diets,bakeries need fewer workers and ranches and steak houses need more workers.This change would create

In the US an increase in the world price of oil would likely

Most economists would agree that eliminating unemployment insurance would

Unemployment insurance

Consumers decide to buy more computers and fewer typewriters.As a result,computer companies expand production while typewriter companies lay-off workers.This is an example of

Economists would predict that,other things the same,the more generous unemployment compensation a country has,

In 2002,the demand for construction workers increased and the demands for textile and steel workers diminished.This illustrates

The government operates programs for job training and job information intended to reduce unemployment.