Questions on Unemployment
1.Measuring unemployment is the job of the
a. Congressional Budget Office.
b. Department of Commerce.
c. Council of Economic Advisers.
d. Bureau of Labor Statistics.
2. Unemployment data are collected
a. from unemployment insurance claims.
b. through a regular survey of about 60,000 households.
c. through a regular survey of about 200,000 firms.
d. using all of the above.
3. The Bureau of Labor Statistics produces data on unemployment
a. weekly.
b. monthly.
c. quarterly.
d. yearly.
4. Which of the following is not one of the categories into which the Bureau of Labor Statistics places each adult
of each surveyed household?
a. employed
b. unemployed
c. underemployed
d. not in the labor force
5. The Bureau of Labor Statistics counts a member of a surveyed household as an adult if that person is at least
a. 14 years old.
b. 16 years old.
c. 18 years old.
d. 21 years old.
6. Which of the following is correct?
a. The BLS uses data collected from those applying for unemployment insurance to compute the
unemployment rate.
b. The labor force includes all adults who are able to work.
c. Unpaid homemakers are counted as employed by the BLS.
d. People working part time are counted as employed by the BLS.
7. Who of the following is not included in the Bureau of Labor Statistics' “employed” category?
a. those who worked in their own business
b. those who worked as unpaid workers in a family member's business
c. those waiting to be recalled to a job from which they had been laid off
d. those who were temporarily absent from work because of vacation.
8. Which of the following includes everyone in the adult population that the Bureau of Labor Statistics counts as
unemployed?
a. anyone who is not employed
b. anyone who is not employed, is available for work, and has looked for work in the past 4 weeks
c. anyone who is not employed, is available for work, has looked for work in the past 4 weeks, and
anyone who is waiting to be recalled from a job from which they have been laid off
d. anyone who is not employed, is available for work, has looked for work in the past 4 weeks, anyone
who is waiting to be recalled from a job from which they have been laid off, and anyone who is
employed part time and has searched for full time employment in the past 4 weeks
9. Who of the following would be included in the Bureau of Labor Statistics’ “unemployed” category?
a. Cambry, a full-time student who is not looking for work
b. Eric, who is on temporary layoff
c. Carson, who has retired and is not looking for work
d. All of the above are correct.
10. Meredith recently graduated from college but has not yet started working. To be counted as unemployed she
a. does not have to have looked for work.
b. must have looked for work no more than a week ago.
c. must have looked for work no more than 4 weeks ago.
d. must have looked for work no more than 12 weeks ago.
11. A person who is counted as unemployed by the Bureau of Labor Statistics
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.
12. Jason works part-time as a babysitter. The Bureau of Labor Statistics counts Jason as
a. unemployed and in the labor force.
b. unemployed and not in the labor force.
c. employed and in the labor force.
d. employed and not in the labor force.
13. Danielle did not work last week because flooding forced an evacuation of her workplace. The Bureau of
Labor Statistics counts Danielle as
a. unemployed and in the labor force.
b. unemployed and not in the labor force.
c. employed and in the labor force.
d. employed and not in the labor force.
14. Josh is a full-time college student who is not working or looking for a job. The Bureau of Labor Statistics
counts Josh as
a. unemployed and in the labor force.
b. unemployed, but not in the labor force.
c. in the labor force, but not unemployed.
d. neither in the labor force nor unemployed.
15. Jill does not currently have a job, but has applied for several jobs in the previous week. Ken is an unpaid stayat-home dad who has not searched for work in recent years. Who does the BLS count as out of the labor
force?
a. Jill but not Ken
b. Ken but not Jill
c. Jill and Ken
d. neither Jill nor Ken
16. Which of the following is correct?
a. Labor force = number of employed.
b. Labor force = population - number of unemployed.
c. Unemployment Rate = number of unemployed (number of employed + number of unemployed)
100.
d. Unemployment Rate = number of unemployed adult population 100.
17.The labor-force participation rate measures the percentage of the
a. total adult population that is in the labor force.
b. total adult population that is employed.
c. labor force that is employed.
d. labor force that is either employed or unemployed.
18. The labor-force participation rate tells us the fraction of the population that
a. is able to participate in the labor market.
b. has ever been employed.
c. has chosen to participate in the labor market.
d. has chosen not to participate in the labor market.
19. The Bureau of Labor Statistics defines the unemployment rate as the percentage of
a. those unemployed relative to those employed.
b. the labor force that is unemployed.
c. the adult population that is unemployed.
d. the adult population that is unemployed or not in the labor force.
20. The labor force equals the
a. number of people employed.
b. number of people employed plus the number of people unemployed.
c. number of people employed plus the number of people unemployed plus teenagers between ages 14
and 16 who work at least 10 hours a week.
d. adult population.
21. Suppose there are a large number of men who used to work or seek work who now no longer do either. Other
things the same, this makes
a. the number of people unemployed rise but does not change the labor force.
b. the number of people unemployed rise but makes the labor force fall.
c. both the number of people unemployed and the labor force fall.
d. the number of people unemployed fall but does not change the labor force.
22. The labor-force participation rate is computed as
a. (Employed Adult Population) 100.
b. (Employed Labor Force) 100.
c. (Labor Force Adult Population) 100.
d. (Adult Population Labor Force) 100.
23. Satchel loses his job and immediately begins looking for another. Other things the same, the unemployment
rate
a. increases and the labor-force participation rate decreases.
b. and the labor-force participation rate both increase.
c. increases and the labor-force participation rate is unaffected.
d. is unaffected and the labor-force participation rate decreases.
24. Sheamous loses his job and decides to sit on the beach rather than look for work during the next few months.
Other things the same, the unemployment rate
a. increases and the labor-force participation rate decreases.
b. increases and the labor-force participation rate is unaffected.
c. is unaffected and the labor-force participation rate decreases.
d. and the labor-force participation rate are both unaffected.
25.Sirius has just finished high school and started looking for his first job, but has not yet found one. Other things
the same, the unemployment rate
a. and the labor-force participation rate both increase.
b. increases and the labor-force participation rate is unaffected.
c. is unaffected and the labor-force participation rate increases.
d. and the labor-force participation rate are both unaffected.
26. In June 2009 the BLS reported an adult population of 234.9 million, a labor force of 154 million and
employment of 141.6 million. Based on these numbers the unemployment rate was
a. 93.3/234.9.
b. 12.4/234.9.
c. 93.3/154.
d. 12.4/154.
27. 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
a. 154/234.9.
b. 141.6/234.9.
c. 141.6/154.
d. None of the above are correct.
28. Suppose some country had an adult population of about 50 million, a labor-force participation rate of 60
percent, and an unemployment rate of 5 percent. How many people were unemployed?
a. 1.425 million
b. 1.5 million
c. 2.5 million
d. 5 million
29. Data on the unemployment rate in the U.S. since 1960 show that the unemployment rate is
a. always zero.
b. sometimes zero.
c. rarely zero.
d. never zero.
30. The deviation of unemployment from its natural rate is called
a. the normal rate of unemployment.
b. deviant unemployment.
c. cyclical unemployment.
d. fluctuating unemployment.
31. If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7 percent, then by
definition there is
a. cyclical unemployment amounting to 0.5 percent of the labor force.
b. frictional unemployment amounting to 0.5 percent of the labor force.
c. structural unemployment amounting to 0.5 percent of the labor force.
d. search unemployment amounting to 0.5 percent of the labor force.
32. Since 1960, the natural rate of unemployment in the U.S. has been between
a. 0.4 and 0.6 percent.
b. 4 and 6 percent.
c. 6 and 12 percent.
d. 12 and 24 percent.
33.Which of the following is correct?
a. In the U.S. the natural rate of unemployment is frequently near 2%.
b. The natural rate of unemployment fluctuates more than the cyclical rate of unemployment.
c. The cyclical rate of unemployment is sometimes below the natural rate of unemployment.
d. None of the above is correct.
34. Which of the following is a cause of the changing role of women in American society over the past several
decades?
a. new technologies that have reduced the amount of time required to complete routine household
tasks
b. improved birth control
c. changing political and social attitudes
d. All of the above are correct.
35. Over the past several decades, the difference between the labor-force participation rates of men and women in
the U.S. has
a. gradually increased.
b. remained constant.
c. gradually decreased.
d. been eliminated.
36. Over the past several decades in the United States, the labor-force participation rate of women has
a. increased and the labor-force participation rate of men has increased.
b. increased and the labor-force participation rate of men has decreased.
c. decreased and the labor-force participation rate of men has increased.
d. decreased and the labor-force participation rate of men has decreased.
37. 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
38. The BLS counts discouraged workers as
a. employed. Including them as employed makes the unemployment rate lower than otherwise.
b. unemployed. Including them as unemployed makes the unemployment rate higher than otherwise.
c. out of the labor force. If the were counted as unemployed the unemployment rate would be higher.
d. None of the above is correct.
39. Who would be included in the labor force?
a. Homer, who is waiting for his new job to start
b. Michelle, who has become discouraged looking for a job and has quit looking
c. Derrick, an unpaid homemaker
d. None of the above would be included in the labor force.
40. The reported unemployment rate should be viewed as
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.
41. Most spells of unemployment are
a. long, and most unemployment observed at any given time is long term.
b. long, but most unemployment observed at any given time is short term.
c. short, but most unemployment observed at any given time is long term.
d. short, and most unemployment observed at any given time is short term.
42. Which of the following is correct?
a. typically more than one third of the unemployed are new entrants into the job market.
b. most spells of unemployment are short.
c. most unemployment observed at any time is long term.
d. All of the above are correct.
43. Evidence indicates that the typical person who becomes unemployed will
a. soon find a job.
b. find a job, but not before a year or more has gone by.
c. leave the labor force and never return.
d. retire soon after
44. Unemployment that results because it takes time for workers to search for the jobs that best suit their tastes
and skills is called
a. the natural rate of unemployment.
b. cyclical unemployment.
c. structural unemployment.
d. frictional unemployment.
45. Unemployment that results because the number of jobs available in some labor markets may be insufficient to
give a job to everyone who wants one is called
a. the natural rate of unemployment.
b. cyclical unemployment.
c. structural unemployment.
d. frictional unemployment.
46. People who are unemployed because of job search are best classified as
a. cyclically unemployed.
b. structurally unemployed.
c. frictionally unemployed.
d. discouraged workers.
47. Which of the following is not an explanation for the existence of unemployment in the long run?
a. it takes time for workers to search for the jobs that are best suited for them
b. minimum-wage laws
c. unions
d. the business cycle
48. Which of the following is not an explanation for the existence of structural unemployment?
a. efficiency wages
b. job search
c. minimum-wage laws
d. unions
49. Frictional unemployment is thought to explain
a. relatively short spells of unemployment, as is structural unemployment.
b. relatively long spells of unemployment, as is structural unemployment.
c. relatively short spells of unemployment, while structural unemployment is thought to explain
relatively long spells of unemployment.
d. relatively long spells of unemployment, while structural unemployment is thought to explain
relatively short spells of unemployment.
50. People who are unemployed because wages are, for some reason, set above the level that brings labor supply
and demand into equilibrium are best classified as
a. cyclically unemployed.
b. structurally unemployed.
c. frictionally unemployed.
d. discouraged workers.
51. John is a stockbroker. He has had several job offers, but he has turned them down because he thinks he can
find a firm that better matches his tastes and skills. Curtis has looked for work as an accountant for some time.
While the demand for accountants doesn’t appear to be falling, there seems to be more people applying than
jobs available.
a. John and Curtis are both frictionally unemployed.
b. John and Curtis are both structurally unemployed.
c. John is frictionally unemployed, and Curtis is structurally unemployed.
d. John is structurally unemployed, and Curtis is frictionally unemployed.
52. Jenna is searching for a job that suits her tastes about where to live. Mary is looking for a job that makes best
use of her skills.
a. Jenna and Mary are both frictionally unemployed.
b. Jenna and Mary are both structurally unemployed.
c. Jenna is frictionally unemployed, and Mary is structurally unemployed.
d. Jenna is structurally unemployed, and Mary is frictionally unemployed.
53. The natural unemployment rate includes
a. both frictional and structural unemployment.
b. neither frictional nor structural unemployment.
c. structural, but not frictional unemployment.
d. frictional, but not structural unemployment.
54. Cyclical unemployment is caused by
a. frictional and structural unemployment
b. frictional but not structural unemployment
c. structural but not frictional unemployment
d. neither frictional nor structural unemployment
55. Job search
a. is one reason economies always experience some unemployment.
b. is the process of matching workers with appropriate jobs.
c. would not be a problem if all workers and all jobs were the same.
d. All of the above are correct.
56. If all workers and all jobs were the same such that all workers were equally well suited for all jobs, then there
would be no
a. cyclical unemployment.
b. frictional unemployment.
c. natural rate of unemployment.
d. structural unemployment.
57. Sectoral shifts in demand for output
a. create structural unemployment.
b. immediately reduce unemployment.
c. increase unemployment due to job search.
d. do not affect demand for labor.
58. From time to time, the demand for workers has risen in one region of the United States and fallen in another.
This illustrates
a. frictional unemployment created by efficiency wages.
b. structural unemployment created by efficiency wages.
c. frictional unemployment created by sectoral shifts.
d. structural unemployment created by sectoral shifts.
59. Consumers decide to ride bikes more and drive cars less. Bicycle companies expand production while
automobile companies fire workers. This is an example of
a. frictional unemployment created by sectoral shifts.
b. frictional unemployment created by efficiency wages.
c. structural unemployment created by efficiency wages.
d. structural unemployment created by sectoral shifts.
60. Frictional unemployment is inevitable because
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.
61. Public policy
a. can reduce both frictional unemployment and the natural rate of unemployment.
b. can reduce frictional unemployment, but it cannot reduce the natural rate of unemployment.
c. cannot reduce frictional unemployment, but it can reduce the natural rate of unemployment.
d. cannot reduce either frictional unemployment or the natural rate of unemployment.
62. Which of the following does not help reduce frictional unemployment?
a. government-run employment agencies
b. public training programs
c. unemployment insurance
d. All of the above help reduce frictional unemployment.
63. Unemployment insurance
a. reduces search effort which raises unemployment.
b. reduces search effort which lowers unemployment.
c. increases search effort which raises unemployment.
d. increases search effort which decreases unemployment.
64. Unemployment insurance
a. reduces the hardship of unemployment, but it also increases the amount of unemployment.
b. reduces the incentive for the unemployed to find and take new jobs.
c. causes workers to be less likely to seek guarantees of job security when they negotiate with
employers over the terms of employment.
d. All of the above are correct.
65. Which of the following is not a cause of frictional unemployment?
a. the destruction of manufacturing jobs
b. a worker leaving a job to find one with better benefits
c. minimum-wage laws
d. unemployment insurance
66. Minimum wages create unemployment in markets where they create a
a. shortage of labor. Unemployment of this type is called frictional.
b. shortage of labor. Unemployment of this type is called structural.
c. surplus of labor. Unemployment of this type is called frictional.
d. surplus of labor. Unemployment of this type is called structural.
67. When a minimum-wage law forces the wage to remain above the level that balances supply and demand, it
a. raises the quantity of labor supplied and raises the quantity of labor demanded compared to the
equilibrium level.
b. raises the quantity of labor supplied and reduces the quantity of labor demanded compared to the
equilibrium level.
c. reduces the quantity of labor supplied and raises the quantity of labor demanded compared to the
equilibrium level.
d. reduces the quantity of labor supplied and reduces the quantity of labor demanded compared to the
equilibrium level.
68. If the wage is kept above the equilibrium wage for any reason, the result is
a. cyclical unemployment.
b. frictional unemployment.
c. seasonal unemployment.
d. structural unemployment.
69. Wages in excess of their equilibrium level help explain
a. structural unemployment but not the natural rate of unemployment.
b. the natural rate of unemployment but not structural unemployment.
c. both structural unemployment and the natural rate of unemployment.
d. neither structural unemployment nor the natural rate of unemployment.
70. Which of the following does not create unemployment by keeping wages above the equilibrium level?
a. efficiency wages
b. job search
c. minimum-wage laws
d. unions
71. U.S. Department of Labor data show that minimum-wage workers tend to be
a. young and less educated.
b. young and more educated.
c. old and less educated.
d. old and more educated.
72. Between the 1940s and today, union membership in the U.S.
a. rose from about one-eighth to one-third of the labor force.
b. rose from about one-third to one-half of the labor force.
c. fell from about one-half to one-third of the labor force.
d. fell from about one-third to one-eighth of the labor force.
73. In Belgium, Norway, and Sweden, the percentage of workers who belong to unions is
a. almost zero.
b. less than it is in the United States.
c. about the same as it is in the United States.
d. greater than it is in the United States.
74. Sam has no job but keeps applying to get a job with a business that is unionized. He is qualified and he finds
the pay attractive, but the firm is not hiring. Sam is
a. structurally unemployed. Structural unemployment exists even in the long run.
b. structurally unemployed. Structural unemployment does not exist in the long run.
c. frictionally unemployed. Frictional unemployment exists even in the long run.
d. frictionally unemployed. Frictional unemployment does not exist in the long run.
75.Collective bargaining refers to
a. the process by which the government sets exemptions from the minimum wage law.
b. setting the same wage for all employees to prevent conflict among workers.
c. firms colluding to set the wages of employees below equilibrium.
d. the process by which unions and firms agree on the terms of employment.
76. When a union raises the wage above the equilibrium level, it
a. reduces both the quantity of labor supplied and the quantity of labor demanded.
b. reduces the quantity of labor supplied and raises the quantity of labor demanded.
c. raises the quantity of labor supplied and reduces the quantity of labor demanded.
d. raises both the quantity of labor supplied and the quantity of labor demanded.
77. When a union bargains successfully with employers, in that industry,
a. wages and unemployment increase.
b. wages increase and unemployment decreases.
c. wages decrease and unemployment increases.
d. wages and unemployment decrease.
78. Which of the following do unions not cause?
a. frictional unemployment
b. the wage to rise above the equilibrium level
c. conflict between insiders who benefit from high union wages and outsiders who do not get the
union jobs
d. reduced wages in industries without unions
79. Unions contribute to
a. cyclical unemployment.
b. frictional unemployment.
c. seasonal unemployment.
d. structural unemployment.
80. Unions
a. do not affect the natural rate of unemployment.
b. lower the wages of unionized workers.
c. raise the profits of unionized firms.
d. lower the wages of workers in industries without unions.
81. The theory of efficiency wages explains why
a. setting wages at the equilibrium level may increase unemployment.
b. it may be in the best interest of firms to offer wages that are above the equilibrium level.
c. the most efficient way to pay workers is to pay them according to their skills.
d. it is efficient for firms to set wages at the equilibrium level.
82. Efficiency wages
a. increase productivity and reduce unemployment.
b. increase productivity but increase unemployment.
c. decrease productivity but reduce unemployment.
d. decrease productivity and increase unemployment.
83. Noah, the owner of an electronics factory, decides to raise the wages of his workers even though he faces an
excess supply of labor. His decision
a. might increase profits if it attracts a better pool of workers to apply for his firm’s jobs.
b. will increase the excess supply of labor.
c. may increase the quality of his work force.
d. All of the above are correct.
84. According to the theory of efficiency wages, if a firm stops paying efficiency wages it is likely to see
a. an increase in the number of job applicants and an increase in how long workers stay on the job
b. an increase in the number of job applicants and a decrease in how long workers stay on the job
c. a decrease in the number of job applicants and an increase in how long workers stay on the job
d. a decrease in the number of job applicants and a decrease in how long workers stay on the job