Question 1

Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power.

Accepted Answer

A) True 
 B)False

Question 2

Frictional unemployment is

Accepted Answer

A)   not inevitable; rather, it can be reduced to zero by well-designed public policies.
B)   not inevitable; rather, it could be reduced to zero if by the elimination of unemployment insurance.
C)   inevitable, because at any given time, jobs are being created in some firms and destroyed in other firms.
D)   inevitable, because in some industries, wages are always set above the level that brings supply and demand into equilibrium.E) A) and C)
F) All of the above

Question 3

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

Accepted Answer

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.E) B) and C)
F) None of the above

Question 4

Economists at the Congressional Budget Office estimated that for 2009, the U.S. natural rate of unemployment was

Accepted Answer

A)   2.5 percent.
B)   3.0 percent.
C)   5.0 percent.
D)   6.5 percent.E) A) and B)
F) All of the above

Question 5

For the Bureau of Labor Statistics to place someone in the "unemployed" category, that person must

Accepted Answer

A)   have worked no more than 10 hours during the past week..
B)   have tried to find employment during the previous year.
C)   not have been laid off.
D)   None of the above is correct.E) None of the above
F) A) and C)

Question 6

Unemployment insurance causes workers to be less likely to seek guarantees of job security when they negotiate with employers over the terms of employment.

Accepted Answer

A) True 
 B)False

Question 7

The Bureau of Labor Statistics places people in the "employed" category if they

Accepted Answer

A)   are without a job, but are available for work and have tried to find a job during the previous 4 weeks.
B)   work without pay in a family member's business.
C)   are waiting to be recalled to a job from which they had been laid off.
D)   All of the above are correct.E) All of the above
F) B) and D)

Question 8

The adult labor-force participation rate tells us the fraction of the population that has chosen to participate in the labor market.

Accepted Answer

A) True 
 B)False

Question 9

Even though the difference in labor-force participation rates of U.S. males and females has narrowed, the labor-force participation rate of males remains higher than that of females.

Accepted Answer

A) True 
 B)False

Question 10

Efficiency wages contribute to

Accepted Answer

A)   frictional unemployment and the natural rate of unemployment.
B)   frictional unemployment but not the natural rate of unemployment.
C)   structural unemployment and the natural rate of unemployment.
D)   structural unemployment but not the natural rate of unemployment.E) A) and C)
F) None of the above

Question 11

When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the quantity of labor supplied is lower and the quantity of labor demand is higher than at the equilibrium wage.

Accepted Answer

A) True 
 B)False

Question 12

Minimum wages create unemployment in markets where they create a

Accepted Answer

A)   shortage of labor. Unemployment of this type is called frictional.
B)   shortage of labor. Unemployment of this type is called structural.
C)   surplus of labor. Unemployment of this type is called frictional.
D)   surplus of labor. Unemployment of this type is called structural.E) A) and C)
F) C) and D)

Question 13

The unemployment rate equals the percentage of the labor force that is unemployed.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is correct?

Accepted Answer

A)   The labor-force participation rate of women has increased in part due to smaller families.
B)   The labor-force participation rate of men has decreased in part due to men retiring younger and living longer.
C)   Both a and b are correct.
D)   None of the above is correct.E) A) and D)
F) A) and C)

Question 15

The natural rate of unemployment is the desirable rate of unemployment for an economy.

Accepted Answer

A) True 
 B)False

Question 16

Over the past several decades, the difference between the labor-force participation rates of men and women in the U.S. has gradually increased.

Accepted Answer

A) True 
 B)False

Question 17

Public policy, without intending to do so, can increase frictional unemployment.

Accepted Answer

A) True 
 B)False

Question 18

Sandy has graduated from college and is devoting her time to searching for a job. She has seen plenty of openings, but has not yet been offered one that best suits her tastes and skills. Sandy is

Accepted Answer

A)   structurally unemployed. Structural unemployment exists even in the long run.
B)   structurally unemployed. There is no structural unemployment in the long run.
C)   frictionally unemployed. Frictional unemployment exists even in the long run.
D)   frictionally unemployed. There is no frictional unemployment in the long run.E) None of the above
F) A) and B)

Question 19

The Bureau of Labor Statistics produces data on unemployment, types of employment, length of the average workweek, and the duration of unemployment.

Accepted Answer

A) True 
 B)False

Question 20

Public policy can reduce frictional unemployment.

Accepted Answer

A) True 
 B)False

Exam 10: Unemployment

Sandy has graduated from college and is devoting her time to searching for a job. She has seen plenty of openings, but has not yet been offered one that best suits her tastes and skills. Sandy is

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

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Public policy can reduce frictional unemployment.

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Frictional unemployment is

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The Bureau of Labor Statistics produces data on unemployment, types of employment, length of the average workweek, and the duration of unemployment.

Correct AnswerverifiedShow Answer

Economists at the Congressional Budget Office estimated that for 2009, the U.S. natural rate of unemployment was

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Even though the difference in labor-force participation rates of U.S. males and females has narrowed, the labor-force participation rate of males remains higher than that of females.

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When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the quantity of labor supplied is lower and the quantity of labor demand is higher than at the equilibrium wage.

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Which of the following is correct?

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Public policy, without intending to do so, can increase frictional unemployment.

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The natural rate of unemployment is the desirable rate of unemployment for an economy.

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The Bureau of Labor Statistics places people in the "employed" category if they

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Unemployment insurance causes workers to be less likely to seek guarantees of job security when they negotiate with employers over the terms of employment.

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The adult labor-force participation rate tells us the fraction of the population that has chosen to participate in the labor market.

Correct AnswerverifiedShow Answer

Efficiency wages contribute to

Correct AnswerverifiedShow Answer

Minimum wages create unemployment in markets where they create a

Correct AnswerverifiedShow Answer

Over the past several decades, the difference between the labor-force participation rates of men and women in the U.S. has gradually increased.

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Like any cartel, a union is a group of sellers acting together in the hope of exerting their joint market power.

Correct AnswerverifiedShow Answer

For the Bureau of Labor Statistics to place someone in the "unemployed" category, that person must

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The unemployment rate equals the percentage of the labor force that is unemployed.

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