Question 1

Most economists agree that eliminating unemployment insurance would increase the nation's overall level of well-being.

Accepted Answer

A) True 
 B)False

Question 2

Three possible reasons for an above-equilibrium wage are minimum-wage laws,unions,and efficiency wages.

Accepted Answer

A) True 
 B)False

Question 3

Long-run unemployment arises from a single problem that has a single solution.

Accepted Answer

A) True 
 B)False

Question 4

Data on unemployment indicate that most people who become unemployed will soon find jobs.

Accepted Answer

A) True 
 B)False

Question 5

Frictional unemployment is inevitable because the economy is always changing.

Accepted Answer

A) True 
 B)False

Question 6

Renee is the CEO of a corporation that hires nonunion labor.According to the theory of efficiency wages,if she decides to pay her workers more than the competitive equilibrium wage,then

Accepted Answer

A)   the profits of her firm might increase.
B)   the higher wages will induce her workers to shirk.
C)   the turnover of her workers may increase.
D)   she will face a shortage of labor.E) A) and C)
F) None of the above

Question 7

If changing consumer preferences increase the demand for consumer electronics and decrease the demand for wool clothing,the economy will likely exhibit

Accepted Answer

A)   an increase in the natural rate of unemployment.
B)   a decrease in the natural rate of unemployment.
C)   frictional unemployment.
D)   efficiency wages.E) None of the above
F) All of the above

Question 8

The unemployment that results from the quantity of labor supplied exceeding the quantity demanded is called structural unemployment.

Accepted Answer

A) True 
 B)False

Question 9

According to the theory of efficiency wages,firms operate more efficiently if wages are above the equilibrium level.

Accepted Answer

A) True 
 B)False

Question 10

Frictional unemployment results from

Accepted Answer

A)   job searching.It is often thought to explain relatively short spells of unemployment.
B)   job searching.It is often thought to explain relatively long spells of unemployment
C)   a surplus in the some labor markets.It is often thought to explain relatively short spells of unemployment.
D)   a surplus in some labor markets.It is often thought to explain relatively long spells of unemployment.E) A) and D)
F) C) and D)

Question 11

Economists have found that union workers earn about 30 to 40 percent more than similar workers who do not belong to unions.

Accepted Answer

A) True 
 B)False

Question 12

The Bureau of Labor Statistics produces data on unemployment based on the number of people collecting unemployment insurance.

Accepted Answer

A) True 
 B)False

Question 13

The reported unemployment rate should be viewed as

Accepted Answer

A)   a useful but imperfect measure of joblessness.
B)   clearly smaller than the true unemployment rate.
C)   clearly larger than the true unemployment rate.
D)   being very close to the true unemployment rate.E) A) and B)
F) A) and C)

Question 14

Frictional unemployment is inevitable because

Accepted Answer

A)   sectoral shifts are always happening.
B)   there is a federal minimum-wage law in the U.S.
C)   some people do not want to be employed.
D)   unions are very popular in the U.S.E) A) and D)
F) A) and B)

Question 15

The theory of efficiency wages provides a possible explanation as to why

Accepted Answer

A)   workers form unions.
B)   firms should try to reduce surpluses of labor.
C)   firms may be inclined to keep their workers' wages above the equilibrium level.
D)   firms may be inclined to keep their workers' wages below the equilibrium level.E) A) and B)
F) None of the above

Question 16

The unemployment rate reported by the Bureau of Labor Statistics clearly understates the true unemployment rate.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following is not a cause of frictional unemployment?

Accepted Answer

A)   the destruction of manufacturing jobs
B)   a worker leaving a job to find one with better benefits
C)   minimum-wage laws
D)   unemployment insuranceE) C) and D)
F) A) and D)

Question 18

Unemployment insurance

Accepted Answer

A)   may improve the ability of the economy to match workers with appropriate jobs.
B)   reduces the job search efforts of the unemployed.
C)   increases the amount of frictional unemployment in the economy.
D)   All of the above are correct.E) A) and B)
F) A) and C)

Question 19

Some people who are employed or who are not making serious effort to find employment will report themselves as unemployed.Some people who want to find work will be counted as out of the labor force.

Accepted Answer

A)   Both the first and the second fact tend to make the reported unemployment rate lower than otherwise.
B)   Both the first and the second fact tend to make the reported unemployment rate higher than otherwise.
C)   The first fact tends to make the reported unemployment rate higher than otherwise,while the second fact tends to make the reported unemployment rate lower than otherwise.
D)   The first fact tends to make the reported unemployment rate lower than otherwise,while the second fact tends to make the reported unemployment rate higher than otherwise.E) B) and C)
F) A) and B)

Question 20

In June 2009 the BLS reported an adult population of 234.9 million,unemployment of 12.4 million,and employment of 141.6 million.Based on these numbers the labor-force participation rate was

Accepted Answer

A)   154/234.9.
B)   141.6/234.9.
C)   141.6/154.
D)   None of the above are correct.E) B) and C)
F) A) and D)

Exam 28: Unemployment

The unemployment rate reported by the Bureau of Labor Statistics clearly understates the true unemployment rate.

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The unemployment that results from the quantity of labor supplied exceeding the quantity demanded is called structural unemployment.

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Economists have found that union workers earn about 30 to 40 percent more than similar workers who do not belong to unions.

Correct AnswerverifiedShow Answer

The Bureau of Labor Statistics produces data on unemployment based on the number of people collecting unemployment insurance.

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The theory of efficiency wages provides a possible explanation as to why

Correct AnswerverifiedShow Answer

According to the theory of efficiency wages,firms operate more efficiently if wages are above the equilibrium level.

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Some people who are employed or who are not making serious effort to find employment will report themselves as unemployed.Some people who want to find work will be counted as out of the labor force.

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Data on unemployment indicate that most people who become unemployed will soon find jobs.

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Frictional unemployment is inevitable because the economy is always changing.

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Unemployment insurance

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Renee is the CEO of a corporation that hires nonunion labor.According to the theory of efficiency wages,if she decides to pay her workers more than the competitive equilibrium wage,then

Correct AnswerverifiedShow Answer

Most economists agree that eliminating unemployment insurance would increase the nation's overall level of well-being.

Correct AnswerverifiedShow Answer

Frictional unemployment is inevitable because

Correct AnswerverifiedShow Answer

Which of the following is not a cause of frictional unemployment?

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Frictional unemployment results from

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The reported unemployment rate should be viewed as

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Long-run unemployment arises from a single problem that has a single solution.

Correct AnswerverifiedShow Answer

In June 2009 the BLS reported an adult population of 234.9 million,unemployment of 12.4 million,and employment of 141.6 million.Based on these numbers the labor-force participation rate was

Correct AnswerverifiedShow Answer

Three possible reasons for an above-equilibrium wage are minimum-wage laws,unions,and efficiency wages.

Correct AnswerverifiedShow Answer

If changing consumer preferences increase the demand for consumer electronics and decrease the demand for wool clothing,the economy will likely exhibit

Correct AnswerverifiedShow Answer

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