Question 1

Frictional unemployment is the result of
A)a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs.
B)the search process of matching workers with jobs.
C)the ups and downs in inflation.
D)a slowdown in the economy.

Accepted Answer

The answer of Frictional unemployment is the result of
A)a persistent...

Question 2

According to the text,economists consider full employment to occur when
A)everyone who wants a job has a job.
B)frictional unemployment equals zero.
C)the sum of frictional unemployment and structural unemployment equals zero.
D)the unemployment rate consists of only frictional and structural unemployment.

Accepted Answer

Economists consider full employment to occur when the unemployment rate consists of only frictional and structural unemployment, excluding cyclical unemployment. This reflects a situation where all unemployment is due to the normal turnover in the labor market (frictional) or due to mismatches between workers' skills and job requirements (structural), rather than economic downturns.

Question 3

How would the unemployment rate and the labor force participation rate change if discouraged workers were counted as unemployed rather than counted as out of the labor force? Show using the formula for both measurements.

Accepted Answer

The answer of How would the unemployment rate and the...

Question 4

Fill in the missing values in the table of data collected in the household survey for November,2009.The working-age population,employment,unemployment,and labor force are measured in thousands.Show your work.
 $$\begin{array} { | l | c | } 
\hline \text { Working-age population } & 235,900 \
\hline \text { Employment } & \
\hline \text { Unemployment } & \
\hline \text { Unemployment rate } & 9.4 \% \
\hline \text { Labor force } & \
\hline \text { Labor force participation rate } & 65.5 \% \
\hline
\end{array}$$

Accepted Answer

The answer of Fill in the missing values in the...

Question 5

Article Summary
According to the Bureau of Labor Statistics,the unemployment rate fell from May 2015 to June 2015,and at the same time the labor force participation rate fell to its lowest level in 38 years,to 62.6 percent.The decrease in the labor force participation rate was due to a decline in the size of the workforce.Since the recession of 2007-2009,the participation rate has been falling,due in part to an aging population and increased retirement of the baby boomers.
-Refer to the Article Summary.Explain how the declining labor force could have led to the decrease in the unemployment rate.

Accepted Answer

The answer of Article Summary
According to the Bureau of Labor...

Question 6

The Bureau of Labor Statistics counts as employed people who work part-time,but would prefer to work full-time.Suppose the people who had part-time jobs,but wanted full-time jobs,were counted as unemployed.Explain how the unemployment rate and the labor force participation rate would change.

Accepted Answer

The answer of The Bureau of Labor Statistics counts as...

Question 7

Full employment is not considered to be zero unemployment,because
A)some cyclical unemployment always exists.
B)some people do not want a job.
C)there are not enough jobs for everyone who wants one.
D)people do not find jobs instantaneously.

Accepted Answer

Full employment acknowledges the existence of frictional unemployment, which occurs when people are between jobs or are entering the workforce. This means that even when the economy is at full employment, there will still be some level of unemployment because people are in the process of finding new jobs, not because there are no jobs available.

Question 8

The natural rate of unemployment is the amount of unemployment
A)associated with the business cycle.
B)equal to frictional plus structural unemployment.
C)that exists when the economy goes into recession.
D)that exists when the economy is in an expansion.

Accepted Answer

The natural rate of unemployment is the sum of frictional and structural unemployment, i.e. the unemployment rate that exists when the labor market is in equilibrium and there is no cyclical unemployment.

Question 9

The advice to "keep searching,there are plenty of jobs around here for which you are qualified," would be most appropriate for which of the following types of unemployment?
A)frictional unemployment
B)structural unemployment
C)cyclical unemployment
D)seasonal unemployment

Accepted Answer

Frictional unemployment is caused by individuals who are in between jobs or searching for better opportunities. Therefore, the advice to keep searching for jobs for which you are qualified is most appropriate for frictional unemployment. This advice may not be as effective for other types of unemployment such as structural or cyclical unemployment, which are caused by broader economic factors.

Question 10

A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat.This lumberjack would be
A)frictionally unemployed.
B)cyclically unemployed.
C)structurally unemployed.
D)seasonally unemployed.

Accepted Answer

The lumberjack lost his job due to a structural change in the economy - the imposition of timber cutting restrictions by the EPA. This change is permanent and affects the entire industry, leading to the unemployment of the lumberjack. This is different from frictional unemployment (temporary unemployment due to transitions between jobs), cyclical unemployment (unemployment caused by fluctuations in the business cycle), and seasonal unemployment (unemployment due to changes in the season or weather).

Question 11

If cyclical unemployment is eliminated in the economy,then
A)the economy is considered to be at full employment.
B)the unemployment rate is below the natural rate of unemployment.
C)the unemployment rate is above the natural rate of unemployment.
D)the economy is at less than full employment.

Accepted Answer

Cyclical unemployment refers to the type of unemployment that occurs due to fluctuations in the business cycle, such as during a recession. If this type of unemployment is eliminated, then it means that all those who are willing and able to work are employed, which is considered to be full employment. Therefore, the answer is choice A.

Question 12

In 2015,JP Morgan Chase announced that it was laying off 5,000 employees.The laid-off employees who were not able to find jobs at another bank due to a permanent decline in demand in the banking industry would be considered
A)structurally unemployed.
B)frictionally unemployed.
C)seasonally unemployed.
D)cyclically unemployed.

Accepted Answer

The layoff was due to a permanent decline in demand in the banking industry, which means that the jobs lost were not likely to return. This type of unemployment is called structural unemployment.

Question 13

Structural unemployment is the result of
A)a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs.
B)the search process of matching workers with jobs.
C)the ups and downs in inflation.
D)a slowdown in the economy.

Accepted Answer

Structural unemployment is a type of long-term unemployment caused by a mismatch between the skills and characteristics of workers and the requirements of the jobs. It often occurs due to changes in technology, globalization, or a shift in consumer preferences, making certain jobs obsolete or less in demand.

Question 14

Suppose 180,000 people are employed,20,000 people are unemployed,and 50,000 people are out of the labor force.Calculate the labor force participation rate.

Accepted Answer

The answer of Suppose 180,000 people are employed,20,000 people are...

Question 15

A student who just graduated from college but has not found a job would most likely be
A)frictionally unemployed.
B)structurally unemployed.
C)cyclically unemployed.
D)seasonally unemployed.

Accepted Answer

Frictional unemployment occurs when individuals are temporarily between jobs or are in the process of transitioning from one job to another. A new graduate who is actively searching for a job but has not yet found one is an example of frictional unemployment. This is because the job search process can take some time, and there is typically a period of unemployment between the end of a previous job and the start of a new one.

Question 16

Cyclical unemployment is the result of
A)a persistent mismatch between the skills and characteristics of workers and the requirements of the jobs.
B)the search process of matching workers with jobs.
C)the ups and downs in inflation.
D)a slowdown in the economy.

Accepted Answer

Cyclical unemployment occurs due to a slowdown in the economy. This type of unemployment occurs when there is a downturn in economic activity, leading to businesses scaling back their operations, cutting jobs, and laying off workers. As a result, people who lose their jobs during a recession or economic downturn are often unemployed for a significant amount of time as there may be fewer job opportunities available.

Question 17

The Bureau of Labor Statistics does not count discouraged workers as unemployed.Suppose discouraged workers were counted as unemployed.Explain how the unemployment rate and the labor force participation rate would change.

Accepted Answer

The answer of The Bureau of Labor Statistics does not...

Question 18

Fill in the missing values in the table of data collected in the household survey for December,1996.The working-age population,employment,unemployment,and labor force are measured in thousands.Show your work.
 $$\begin{array} { | l | c | } 
\hline \text { Working-age population } & \
\hline \text { Employment } & \
\hline \text { Unemployment } & \
\hline \text { Unemployment rate } & 5.4 \% \
\hline \text { Labor force } & 135,113 \
\hline \text { Labor force participation rate } & 67.0 \% \
\hline
\end{array}$$

Accepted Answer

The answer of Fill in the missing values in the...

Question 19

During the Great Depression,cyclical unemployment increased as the recession continued.This increase in cyclical unemployment
A)increased the natural rate of unemployment.
B)decreased the natural rate of unemployment.
C)had no effect on the natural rate of unemployment.
D)could have increased or decreased the natural rate of unemployment.

Accepted Answer

Cyclical unemployment is directly related to the macroeconomic situation of an economy, such as a recession or a depression, and varies with the business cycle. The natural rate of unemployment, however, is determined by structural factors in the labor market, such as market inefficiencies, and is not affected by short-term cyclical fluctuations. Therefore, an increase in cyclical unemployment during the Great Depression would not have affected the natural rate of unemployment.

Question 20

Suppose 180,000 people are employed,20,000 people are unemployed,the working-age population is 250,000,and 50,000 people are out of the labor force.Calculate the unemployment rate.

Accepted Answer

The answer of Suppose 180,000 people are employed,20,000 people are...

Quiz 20: Unemployment and Inflation

Frictional unemployment is the result of

According to the text,economists consider full employment to occur when

How would the unemployment rate and the labor force participation rate change if discouraged workers were counted as unemployed rather than counted as out of the labor force? Show using the formula for both measurements.

The Bureau of Labor Statistics counts as employed people who work part-time,but would prefer to work full-time.Suppose the people who had part-time jobs,but wanted full-time jobs,were counted as unemployed.Explain how the unemployment rate and the labor force participation rate would change.

Full employment is not considered to be zero unemployment,because

The natural rate of unemployment is the amount of unemployment

The advice to "keep searching,there are plenty of jobs around here for which you are qualified," would be most appropriate for which of the following types of unemployment?

A lumberjack loses his job because timber cutting restrictions were imposed by the EPA to protect the spotted owl habitat.This lumberjack would be

If cyclical unemployment is eliminated in the economy,then

In 2015,JP Morgan Chase announced that it was laying off 5,000 employees.The laid-off employees who were not able to find jobs at another bank due to a permanent decline in demand in the banking industry would be considered

Structural unemployment is the result of

Suppose 180,000 people are employed,20,000 people are unemployed,and 50,000 people are out of the labor force.Calculate the labor force participation rate.

A student who just graduated from college but has not found a job would most likely be

Cyclical unemployment is the result of

The Bureau of Labor Statistics does not count discouraged workers as unemployed.Suppose discouraged workers were counted as unemployed.Explain how the unemployment rate and the labor force participation rate would change.

During the Great Depression,cyclical unemployment increased as the recession continued.This increase in cyclical unemployment

Suppose 180,000 people are employed,20,000 people are unemployed,the working-age population is 250,000,and 50,000 people are out of the labor force.Calculate the unemployment rate.