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Exam 28: Unemployment and Its Natural Rate

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Question 71

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Which of the following is not a cause of the decline in the U.S. men's labor-force participation rate over the past several decades?

A) Young men now stay in school longer than their fathers and grandfathers did.
B) Older men now retire earlier and live longer.
C) With more women employed, there are fewer jobs now available to men.
D) More fathers now stay at home to raise their children.

E) B) and D)
F) A) and D)

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Question 72

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Which of the following is not correct?

A) Most people who become unemployed will soon find jobs.
B) In an ideal labor market, wages would adjust to ensure that all workers are always fully employed.
C) The unemployment rate occasionally falls to zero.
D) There are always some workers without jobs, even when the overall economy is doing well.

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

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Question 73

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The deviation of unemployment from its natural rate is called cyclical unemployment.

Job search is the process of matching workers with appropriate jobs.

An increase in the minimum wage above the equilibrium wage

The natural rate of unemployment is closely associated with the short-run ups and downs of economic activity.

Within the U.S. population, women of prime working age (ages 25-54) have similar rates of labor-force participation than men of prime working age (ages 25-54), regardless of race.

Employment can rise in one region of the country while it falls in another.

A union is an employer association that bargains with workers over wages, benefits, and working conditions.

Write the formula for calculating the labor force participation rate.

Joshua is working from home for a start-up company developing mobile apps. The Bureau of Labor Statistics counts Joshua as

Most job search in the U.S. economy takes place with the help of the government.

Table 28-5 2015 Labor Data for Tajnia $\begin{array} { | l | l | } \hline \text { Number of adults employed } & 10,000 \\\hline \text { Number of adults unemployed } & 2,250 \\\hline \text { Number of adults not in the labor force } & 17,750 \\\hline\end{array}$ -Refer to Table 28-5. The labor force of Tajnia in 2015 is 10,000.

Explain how the actions of labor unions generate greater unemployment.

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

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

Not all unemployment ends with the job seeker finding a job.

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

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

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