Question 1

Structural unemployment results primarily from automation and long-lasting changes in demand.

Accepted Answer

Structural unemployment occurs when there are changes in demand or technology that lead to a mismatch between the skills of the labor force and the jobs that are available. Automation often leads to structural unemployment as machines replace workers, and changes in consumer demand can shift industries and leave workers without the necessary skills for new jobs.

Question 2

A seamstress who quits her job in Houston and moves to New York where additional seamstresses are needed is said to be frictionally unemployed.

Accepted Answer

Frictional unemployment refers to the temporary unemployment that arises when someone is in-between jobs or in the process of searching for a new job. In this scenario, the seamstress quit her job in Houston and is in the process of searching for a new job in New York, making her frictionally unemployed.

Question 3

The cyclical unemployment rate can never be negative.

Accepted Answer

Cyclical unemployment can be negative if the economy is operating above its potential output, leading to a labor shortage where demand for workers exceeds supply.

Question 4

If Jorge is temporarily absent from his regular job because of an industrial dispute,the Bureau of Labor Statistics will classify him as unemployed.

Accepted Answer

The Bureau of Labor Statistics does not classify workers who are temporarily absent from their jobs due to an industrial dispute as unemployed; instead, they are considered employed but not at work.

Question 5

The CPI in the base year is always equal to 100.

Accepted Answer

The CPI (consumer price index) by definition is equal to 100 in the base year. This is because the CPI is a measure of the cost of purchasing a fixed basket of goods and services relative to the cost of purchasing that same basket in a base year, which is assigned a value of 100.

Question 6

Most unemployed persons fall into the category of job loser.

Accepted Answer

According to the Bureau of Labor Statistics, the majority of unemployed persons are job losers, meaning they were laid off or their job was eliminated.

Question 7

For all practical purposes,a discouraged worker is an unemployed person because a discouraged worker is not working.

Accepted Answer

A discouraged worker is not considered unemployed in labor force statistics because they are not actively seeking employment.

Question 8

If the Bureau of Labor Statistics considers Jessica to be a discouraged worker,then she is not counted as unemployed for purposes of computing the official unemployment rate.

Accepted Answer

This is true. Discouraged workers are not considered part of the official unemployment rate because they have given up actively looking for work.

Question 9

Describe the terms frictional unemployment,structural unemployment,and cyclical unemployment.Give a hypothetical example of each to help support your answer.

Accepted Answer

The answer of Describe the terms frictional unemployment,structural unemployment,and cyclical...

Question 10

Some economists argue that the recent relatively high rate of unemployment has resulted in part from the fact that a part of the workforce has not made the adjustment to new technologies.

Accepted Answer

This argument suggests that as new technologies are introduced, certain skills become obsolete, resulting in those workers facing unemployment or not finding jobs due to their limited skillset. This is a possible contributing factor to the current high rate of unemployment.

Question 11

Jamaal lost his job when a mechanical device replaced people with his skills.If Jamaal's skills are non-transferable,he would be considered to be structurally unemployed.

Accepted Answer

Structural unemployment occurs when workers lose their jobs due to changes in the structure of the economy that make their particular skills or field of work obsolete. In this case, Jamaal's skills are non-transferable and have become obsolete due to the introduction of a mechanical device, making him structurally unemployed.

Question 12

Describe what the unemployment rate and the employment rate measure.If we were to sum the unemployment rate and the employment rate,would that sum be equal to one hundred percent? Explain why or why not.

Accepted Answer

The answer of Describe what the unemployment rate and the...

Question 13

The base year is always the year in which prices were the lowest.

Accepted Answer

The base year is the year chosen as a reference point for comparing the prices of goods and services in different years. It is not necessarily the year with the lowest prices, but rather the year that is used as a standard for comparison.

Question 14

If the unemployment rate drops,then it necessarily follows that some of the people who were once unemployed are now employed.

Accepted Answer

The answer of If the unemployment rate drops,then it necessarily...

Question 15

The federal government agency that is responsible for determining the inflation rate and the unemployment rate is the Federal Reserve.

Accepted Answer

The Federal Reserve is responsible for setting monetary policy and regulating banks, but the Bureau of Labor Statistics is responsible for measuring and reporting on the inflation rate and unemployment rate.

Question 16

The CPI is based on a representative group of goods called the market basket.

Accepted Answer

The CPI is based on a representative group of goods called the market basket. This basket contains various goods and services that are commonly purchased by consumers, and the prices of these items are tracked over time to calculate inflation.

Question 17

Describe the difference between the employment rate and the labor force participation rate (LFPR).Under what circumstance would the two be equal to one another?

Accepted Answer

The answer of Describe the difference between the employment rate...

Question 18

If Carlos is waiting to be called back to his job from which he has been temporarily laid off,the Bureau of Labor Statistics will classify him as unemployed.

Accepted Answer

According to the Bureau of Labor Statistics, individuals who are temporarily laid off and waiting for a call back to their job are still considered unemployed.

Question 19

Describe what the term "full employment" means to an economist.

Accepted Answer

The answer of Describe what the term "full employment" means...

Question 20

When making historical comparison's of one's income,is it better to use real income or nominal income for the basis of your comparison? Explain why one makes a better comparison than the other.

Accepted Answer

The answer of When making historical comparison's of one's income,is...

Quiz 6: Macroeconomic Measurements, part I: Prices and Unemployment