Question 1

Table 28-3
2009 Labor Data for Baltivia 
-Refer to Table 28-3. What was Baltivia's labor-force participation rate in 2009?

Accepted Answer

A)  55%
B)  63%
C)  66.9%
D)  87.3%E) All of the above
F) C) and D)

Question 2

In the long run the unemployment rate equals

Accepted Answer

A)  zero.
B)  the cyclical rate of unemployment.
C)  the natural rate of unemployment.
D)  the sum of the cyclical and natural rate of unemployment.E) A) and D)
F) A) and C)

Question 3

Efficiency wages, minimum-wage laws, and unions all keep wages

Accepted Answer

A)  below the equilibrium level, causing a shortage of labor.
B)  below the equilibrium level, causing a surplus of labor.
C)  above the equilibrium level, causing a shortage of labor.
D)  above the equilibrium level, causing a surplus of labor.E) A) and D)
F) B) and C)

Question 4

Table 28-5
Labor Force Statistics by Age
Suppose people in the adult population in a small country are classified based on their age. 
-Refer to Table 28-5. In the proper order, which age group has the highest unemployment rate and which has the highest participation rate?

Accepted Answer

A)  under 55, under 55
B)  under 55, 55 and older
C)  55 and older, under 55
D)  55 and older, 55 and olderE) All of the above
F) A) and D)

Question 5

Ignoring the differences across states, explain the benefit provided to the typical worker in the United States from unemployment insurance.

Accepted Answer

Worker receives 50% ...

Question 6

Table 28-3
2009 Labor Data for Baltivia 
-Refer to Table 28-3. How many adults were not in Baltivia's labor force in 2009?

Accepted Answer

A)  4,400
B)  6,620
C)  7,400
D)  8,690E) B) and C)
F) A) and D)

Question 7

Efficiency wages

Accepted Answer

A)  raise the productivity of a firm's workers, so the firm hires more workers.
B)  raise the productivity of a firm's workers, so the firm hires fewer workers.
C)  reduce the productivity of a firms' workers, so the firm hires more workers.
D)  reduce the productivity of a firm's workers, so the firm hires fewer workers.E) B) and C)
F) A) and D)

Question 8

Someone who has a job but is absent from work because she is on vacation is counted as "employed."

Accepted Answer

A) True 
 B)False

Question 9

Unemployment data is collected

Accepted Answer

A)  through a monthly survey of about 20,000 firms.
B)  through a monthly survey of about 60,000 households.
C)  from unemployment insurance claims.
D)  All of the above are correct.E) All of the above
F) A) and B)

Question 10

Discouraged workers are people who want to work but have given up trying to find a job after an unsuccessful search.

Accepted Answer

A) True 
 B)False

Question 11

Suppose that garbage collectors and landscaping workers have no unions. Now suppose that garbage collectors form unions. What does this do to the labor supply and wages of landscaping workers?

Accepted Answer

A)  Both labor supply and wages increase.
B)  Labor supply increases, and wages decrease.
C)  Labor supply decreases, and wages increase.
D)  both labor supply and wages increase.E) All of the above
F) C) and D)

Question 12

When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the result is a shortage of labor.

Accepted Answer

A) True 
 B)False

Question 13

When a minimum-wage law forces the wage to remain above the level that balances supply and demand, there are more workers willing to work than there are jobs, so some workers are unemployed.

Accepted Answer

A) True 
 B)False

Question 14

Suppose that an anti-smoking campaign in Moscow, Russia, is successful so that Muscovites smoke less and chew gum more. Tobacco companies lay off workers, while chewing gum manufacturers employ more workers. This is an example of

Accepted Answer

A)  structural unemployment created by efficiency wages.
B)  structural unemployment created by sectoral shifts.
C)  frictional unemployment created by efficiency wages.
D)  frictional unemployment created by sectoral shifts.E) B) and D)
F) A) and B)

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

Most spells of unemployment are short, and most unemployment observed at any given time is long-term.

Accepted Answer

A) True 
 B)False

Question 17

Adults who were not working but who had jobs from which they were temporarily absent are included in the Bureau of Labor Statistics' "employed" category.

Accepted Answer

A) True 
 B)False

Question 18

A person who is counted as "unemployed" by the Bureau of Labor Statistics

Accepted Answer

A)  is also in the labor force.
B)  must have recently looked for work or be on temporary layoff.
C)  must be at least 16 years old.
D)  All of the above are correct.E) A) and B)
F) C) and D)

Question 19

Every adult who was not employed during the previous four weeks is included in the Bureau of Labor Statistics' "unemployed" category.

Accepted Answer

A) True 
 B)False

Question 20

The natural rate of unemployment

Accepted Answer

A)  arises from a single problem that has a single solution.
B)  is easy for policymakers to reduce.
C)  Both a and b are correct.
D)  None of the above is correct.E) A) and D)
F) None of the above

Exam 28: Unemployment and Its Natural Rate

Efficiency wages, minimum-wage laws, and unions all keep wages

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In the long run the unemployment rate equals

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Most spells of unemployment are short, and most unemployment observed at any given time is long-term.

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Table 28-3 2009 Labor Data for Baltivia -Refer to Table 28-3. What was Baltivia's labor-force participation rate in 2009?

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Efficiency wages

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When a minimum-wage law forces the wage to remain above the level that balances supply and demand, there are more workers willing to work than there are jobs, so some workers are unemployed.

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Ignoring the differences across states, explain the benefit provided to the typical worker in the United States from unemployment insurance.

Correct AnswerverifiedWorker receives 50% ...View AnswerShow Answer

Every adult who was not employed during the previous four weeks is included in the Bureau of Labor Statistics' "unemployed" category.

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When a minimum-wage law forces the wage to remain above the level that balances supply and demand, the result is a shortage of labor.

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The natural rate of unemployment

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Table 28-3 2009 Labor Data for Baltivia -Refer to Table 28-3. How many adults were not in Baltivia's labor force in 2009?

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Adults who were not working but who had jobs from which they were temporarily absent are included in the Bureau of Labor Statistics' "employed" category.

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Suppose that an anti-smoking campaign in Moscow, Russia, is successful so that Muscovites smoke less and chew gum more. Tobacco companies lay off workers, while chewing gum manufacturers employ more workers. This is an example of

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A person who is counted as "unemployed" by the Bureau of Labor Statistics

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Suppose that garbage collectors and landscaping workers have no unions. Now suppose that garbage collectors form unions. What does this do to the labor supply and wages of landscaping workers?

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Someone who has a job but is absent from work because she is on vacation is counted as "employed."

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Table 28-5 Labor Force Statistics by Age Suppose people in the adult population in a small country are classified based on their age. -Refer to Table 28-5. In the proper order, which age group has the highest unemployment rate and which has the highest participation rate?

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Discouraged workers are people who want to work but have given up trying to find a job after an unsuccessful search.

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

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Unemployment data is collected

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Worker receives 50% ...
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