Question 1

The labor force consists of:

Accepted Answer

A)   employed workers only.
B)   adults who do not have a job but who are looking for work.
C)   employed workers and adults who do not have jobs but who are looking for work.
D)   all adult noninstitutionalized civilians.

Question 2

The natural unemployment rate is the rate of _____ unemployment plus the rate of _____ unemployment.

Accepted Answer

A)   cyclical; frictional
B)   structural; frictional
C)   cyclical; structural
D)   frictional and structural; cyclical

Question 3

Consider countries A and B. In country A the minimum wage is 30% of the median wage, and in country B the minimum wage is 60% of the median wage. As a result, the minimum wage will affect more workers in country _____ and create more unemployment in country _____.

Accepted Answer

A)   A; A
B)   A; B
C)   B; B
D)   B; A

Question 4

According to the textbook, one major reason for the increase in the female labor force participation rate after World War II was:

Accepted Answer

A)   an increase in income taxes.
B)   an increase in the overall population because of the baby boom.
C)   an increase in the incentive to work.
D)   a decrease in the male labor force participation rate.

Question 5

A country's total civilian noninstitutionalized adult population is 1 million, and 500,000 people in this country are working, with another 20,000 people looking for work. Which of the following statements about the labor force statistics in this country is accurate?

Accepted Answer

A)   The employment rate is 50% and the unemployment rate is 2%.
B)   The unemployment rate is 2% and the labor force participation rate is 52%.
C)   The employment rate is 96.15% and the labor force participation rate is 52%.
D)   The labor force is 500,000 and the labor force participation rate is 50%.

Question 6

A nation has an adult population of 30 million people. There are 20 million employed people and 5 million people looking for work. What is the unemployment rate? What is the labor force participation rate?

Accepted Answer

The labor force is the number of employe...

Question 7

Which of the following is NOT part of natural unemployment?

Accepted Answer

A)   cyclical unemployment
B)   frictional unemployment
C)   structural unemployment
D)   frictional and structural

Question 8

Which of the following does NOT contribute directly to the persistence of structural unemployment?

Accepted Answer

A)   unemployment benefits
B)   unions
C)   employment protection laws
D)   work tests

Question 9

Increases in the minimum wage are an effective way to increase employment and living standards for low-income households.

Accepted Answer

A) True 
 B)False

Question 10

Minimum wage laws and unions tend to:

Accepted Answer

A)   lower wages and raise unemployment.
B)   raise wages and raise unemployment.
C)   lower wages and lower unemployment.
D)   raise wages and lower unemployment.

Question 11

During a typical nonrecession year, the duration for at least half of the unemployed is:

Accepted Answer

A)   less than 1 week.
B)   less than 14 weeks.
C)   between 15 and 26 weeks.
D)   more than 27 weeks.

Question 12

A worker who works past retirement age but loses retirement benefits:

Accepted Answer

A)   is practicing consumption smoothing.
B)   is essentially being taxed for working.
C)   usually has a greater net gain from working.
D)   has a higher incentive to keep working.

Question 13

Use the following to answer questions: Figure: Labor Supply and Demand 
-(Figure: Labor Supply and Demand)  Refer to the figure. What is the quantity of labor that is unemployed as a result of the labor union's action to increase its wage demands to $11 an hour?

Accepted Answer

A)   700
B)   1,100
C)   1,800
D)   2,700

Question 14

Which of the following is TRUE of frictional unemployment?

Accepted Answer

A)   It arises as a result of too much market competition.
B)   It has a short duration.
C)   It is a result of the minimum wage law.
D)   It rises in a recession.

Question 15

What allows an employee to quit at any time and an employer to fire at any time for any reason?

Accepted Answer

A)   employment-at-will
B)   contractual autonomy
C)   right-to-hire
D)   termination sovereignty

Question 16

The median wage is half the wage that the worker earns in a single hour.

Accepted Answer

A) True 
 B)False

Question 17

The labor force participation rate responds to:

Accepted Answer

A)   incentives to work.
B)   real GDP growth.
C)   job opportunities.
D)   business cycles.

Question 18

Unemployment correlated with the business cycle is called:

Accepted Answer

A)   frictional unemployment.
B)   structural unemployment.
C)   cyclical unemployment.
D)   seasonal unemployment.

Question 19

Use the following to answer questions: Figure: Labor Supply and Demand 
-(Figure: Labor Supply and Demand)  Refer to the figure. What is the unemployment rate caused by the labor union's action to increase its wage demands to $11 an hour?

Accepted Answer

A)   40%
B)   60%
C)   66.7%
D)   75.6%

Question 20

In the United States, the underemployment rate is typically higher than the unemployment rate.

Accepted Answer

A) True 
 B)False

Exam 11: Unemployment and Labor Force Participation

Which of the following is NOT part of natural unemployment?

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A worker who works past retirement age but loses retirement benefits:

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Which of the following is TRUE of frictional unemployment?

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Unemployment correlated with the business cycle is called:

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Which of the following does NOT contribute directly to the persistence of structural unemployment?

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During a typical nonrecession year, the duration for at least half of the unemployed is:

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Increases in the minimum wage are an effective way to increase employment and living standards for low-income households.

Correct AnswerverifiedShow Answer

The natural unemployment rate is the rate of _____ unemployment plus the rate of _____ unemployment.

Correct AnswerverifiedShow Answer

According to the textbook, one major reason for the increase in the female labor force participation rate after World War II was:

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What allows an employee to quit at any time and an employer to fire at any time for any reason?

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In the United States, the underemployment rate is typically higher than the unemployment rate.

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Consider countries A and B. In country A the minimum wage is 30% of the median wage, and in country B the minimum wage is 60% of the median wage. As a result, the minimum wage will affect more workers in country _____ and create more unemployment in country _____.

Correct AnswerverifiedShow Answer

Use the following to answer questions: Figure: Labor Supply and Demand -(Figure: Labor Supply and Demand) Refer to the figure. What is the quantity of labor that is unemployed as a result of the labor union's action to increase its wage demands to $11 an hour?

Correct AnswerverifiedShow Answer

The labor force participation rate responds to:

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Minimum wage laws and unions tend to:

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A country's total civilian noninstitutionalized adult population is 1 million, and 500,000 people in this country are working, with another 20,000 people looking for work. Which of the following statements about the labor force statistics in this country is accurate?

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Use the following to answer questions: Figure: Labor Supply and Demand -(Figure: Labor Supply and Demand) Refer to the figure. What is the unemployment rate caused by the labor union's action to increase its wage demands to $11 an hour?

Correct AnswerverifiedShow Answer

A nation has an adult population of 30 million people. There are 20 million employed people and 5 million people looking for work. What is the unemployment rate? What is the labor force participation rate?

Correct AnswerverifiedThe labor force is the number of employe...View AnswerShow Answer

The labor force consists of:

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The median wage is half the wage that the worker earns in a single hour.

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The natural unemployment rate is the rate of _ unemployment plus the rate of _ unemployment.

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Consider countries A and B. In country A the minimum wage is 30% of the median wage, and in country B the minimum wage is 60% of the median wage. As a result, the minimum wage will affect more workers in country _ and create more unemployment in country _.

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The labor force is the number of employe...
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