Question 1

The number of unemployed can drop simultaneously with increases in the unemployment rate.
This is because the labor force is shrinking,thereby causing people formerly classified as unemployed to be no longer in the labor force.

Accepted Answer

A) True 
 B)False

Question 2

When unemployed people stop looking for jobs,the

Accepted Answer

A)  Unemployment rate increases and the labor force increases.
B)  Unemployment rate decreases and the labor force decreases.
C)  Unemployment rate increases and the labor force decreases.
D)  Unemployment rate decreases and the labor force increases.

Question 3

The official unemployment statistics may exaggerate the significance of unemployment by including the

Accepted Answer

A)  Underemployed.
B)  Phantom unemployed.
C)  Discouraged worker.
D)  High school dropout.

Question 4

All of the following are true about outsourcing of jobs except that it

Accepted Answer

A)  Occurs because labor is cheaper in other countries.
B)  Increases specialization.
C)  Reduces costs and increases profits for companies.
D)  Ultimately leaves the United States worse off.

Question 5

One cartoon in the text shows a contented rich man saying,"I don't like six-percent unemployment either.But I can live with it." The point is that

Accepted Answer

A)  Not everyone experiences the effects of unemployment equally.
B)  Everyone agrees that unemployment should be the top priority for government action.
C)  No one can avoid unemployment or the effects of unemployment.
D)  It is good to be an independent analyst because those types of jobs are always in demanD.The costs of unemployment are borne by those who actually lose their jobs.

Question 6

Individuals who are working part-time while seeking full-time employment are classified as

Accepted Answer

A)  Unemployed.
B)  Underemployed.
C)  Discouraged workers.
D)  Phantom unemployeD.This might be someone who is teaching part-time but seeking a full-time teaching job while working the part-time job.

Question 7

Underemployment is defined as

Accepted Answer

A)  Individuals desiring to work but who are discouraged by the process and have given up looking.
B)  People who have been laid off because of a recession and have little chance of finding a job.
C)  Individuals who are lazy and will not go out looking for a job but say they are looking.
D)  People seeking full-time paid employment but work only part-time or are employed at jobs below their capability.

Question 8

The observation that a 1 percent increase in unemployment leads to a 2 percent decrease in real output is known as

Accepted Answer

A)  A recession.
B)  A Lucas Wedge.
C)  Okun's Law.
D)  Under allocation of resources.

Question 9

How can the outsourcing of jobs cause production possibilities to expand?

Accepted Answer

Businesses choose to outsource jobs or m...

Question 10

The lowest level of unemployment compatible with price stability

Accepted Answer

A)  Is referred to as full employment.
B)  Is estimated at between 0 and 2 percent unemployment.
C)  Allows for some cyclical unemployment.
D)  Is equal to the natural rate of unemployment plus the inflation rate.

Question 11

The natural rate of unemployment includes

Accepted Answer

A)  Seasonal and cyclical unemployment only.
B)  Cyclical and frictional unemployment only.
C)  Structural and seasonal unemployment only.
D)  Frictional and structural unemployment only.

Question 12

Frictional unemployment stems from an insufficient level of demand in the economy.
Cyclical unemployment stems from an insufficient level of demand in the economy.

Accepted Answer

A) True 
 B)False

Question 13

Of the following reasons for unemployment,which will increase most because of a recession?

Accepted Answer

A)  Job losers.
B)  Reentrants.
C)  New entrants.
D)  Job leavers.

Question 14

If more teenagers stay in school longer rather than dropping out and entering the labor force,

Accepted Answer

A)  The production possibilities curve shifts outward.
B)  The production possibilities curve shifts inward.
C)  The production possibilities curve remains unchanged.
D)  The unemployment rate goes up.

Question 15

Which of the following is considered a discouraged worker?

Accepted Answer

A)  A professional football player who is forced to play a new position.
B)  A professional football player who gets cut after the preseason schedule has been completed.
C)  A professional football coach coming off a 0-16 season.
D)  A retired professional football player who tried to make a comeback but found no one was willing to give him a tryout,so he no longer looks for a job.

Question 16

Which of the following unemployment categories is most clearly related to the rate of growth in real GDP?

Accepted Answer

A)  Structural.
B)  Seasonal.
C)  Frictional.
D)  Cyclical.

Question 17

If workers do not have the skills that are required in the job market,which of the following will occur?

Accepted Answer

A)  Structural unemployment.
B)  Seasonal unemployment.
C)  Cyclical unemployment.
D)  Frictional unemployment.

Question 18

After the harvest,some farmhands lose their jobs.They are considered to be

Accepted Answer

A)  Cyclically unemployed.
B)  Structurally unemployed.
C)  Frictionally unemployed.
D)  Seasonally unemployeD.Seasonal unemployment occurs when the appropriate production season changes and work is no longer needed until the following year.

Question 19

When workers begin retiring at earlier ages,the production possibilities curve shifts outward.
This would cause the production possibilities curve to shift inward.

Accepted Answer

A) True 
 B)False

Question 20

According to Okun's Law,if unemployment rises by 5 percent while imports and exports increase at roughly the same rate,the economy will lose output equal to

Accepted Answer

A)  1 percent.
B)  2 percent.
C)  5 percent.
D)  10 percent.

Exam 6: Unemployment

Of the following reasons for unemployment,which will increase most because of a recession?

Correct AnswerverifiedShow Answer

One cartoon in the text shows a contented rich man saying,"I don't like six-percent unemployment either.But I can live with it." The point is that

Correct AnswerverifiedShow Answer

If workers do not have the skills that are required in the job market,which of the following will occur?

Correct AnswerverifiedShow Answer

Underemployment is defined as

Correct AnswerverifiedShow Answer

Which of the following unemployment categories is most clearly related to the rate of growth in real GDP?

Correct AnswerverifiedShow Answer

When workers begin retiring at earlier ages,the production possibilities curve shifts outward. This would cause the production possibilities curve to shift inward.

Correct AnswerverifiedShow Answer

The natural rate of unemployment includes

Correct AnswerverifiedShow Answer

After the harvest,some farmhands lose their jobs.They are considered to be

Correct AnswerverifiedShow Answer

Frictional unemployment stems from an insufficient level of demand in the economy. Cyclical unemployment stems from an insufficient level of demand in the economy.

Correct AnswerverifiedShow Answer

If more teenagers stay in school longer rather than dropping out and entering the labor force,

Correct AnswerverifiedShow Answer

The lowest level of unemployment compatible with price stability

Correct AnswerverifiedShow Answer

According to Okun's Law,if unemployment rises by 5 percent while imports and exports increase at roughly the same rate,the economy will lose output equal to

Correct AnswerverifiedShow Answer

The number of unemployed can drop simultaneously with increases in the unemployment rate. This is because the labor force is shrinking,thereby causing people formerly classified as unemployed to be no longer in the labor force.

Correct AnswerverifiedShow Answer

The official unemployment statistics may exaggerate the significance of unemployment by including the

Correct AnswerverifiedShow Answer

The observation that a 1 percent increase in unemployment leads to a 2 percent decrease in real output is known as

Correct AnswerverifiedShow Answer

Individuals who are working part-time while seeking full-time employment are classified as

Correct AnswerverifiedShow Answer

How can the outsourcing of jobs cause production possibilities to expand?

Correct AnswerverifiedBusinesses choose to outsource jobs or m...View AnswerShow Answer

Which of the following is considered a discouraged worker?

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All of the following are true about outsourcing of jobs except that it

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When unemployed people stop looking for jobs,the

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Businesses choose to outsource jobs or m...
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