Unemployment
Name:_____________________________
____ 1.
The Bureau of Labor Statistics is part of the U.S. Department of
a. the Treasury.
b. Commerce.
c. Labor.
d. the Interior.
____ 2.
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.
____ 3.
The Bureau of Labor Statistics produces data on
a. unemployment.
b. types of employment.
c. length of the average workweek.
d. All of the above are correct.
____ 4.
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.
____ 5.
a. weekly.
b. monthly.
c. quarterly.
d. yearly.
The Bureau of Labor Statistics produces data on unemployment
____ 6.
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
____ 7.
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.
____ 8.
If an unemployed person quits looking for work, then, eventually the unemployment rate
a. decreases and the labor-force participation rate is unaffected.
b. and the labor-force participation rate both decrease.
c. is unaffected and the labor-force participation rate decreases.
d. and the labor-force participation rate are both unaffected.
____ 9.
The Bureau of Labor Statistics reported in 2005 that there were 53.23 million people over age
25 who had at least a bachelor’s degree, 40.59 million of whom were employed and 0.98 million of whom
were unemployed. What were the labor-force participation rate and the unemployment rate for this group?
a. 76.3% and 1.8%
b. 76.3% and 2.4%
c. 78.1% and 1.8%
d. 78.1% and 2.4%
____ 10.
The Bureau of Labor Statistics reported in 2005 that there were 50.40 million people over age
25 whose highest level of education was some college or an associate degree, 33.86 million of whom were
employed and 1.27 million of whom were unemployed. What were the labor-force participation rate and the
unemployment rate for this group?
a. 69.7% and 2.5%
b. 69.7% and 3.6%
c. 67.2% and 2.5%
d. 67.2% and 3.6%
____ 11.
The Bureau of Labor Statistics reported in 2005 that there were 59.98 million people over age
25 whose highest level of education was a high school degree or equivalent, 36.40 million of whom were
employed and 1.93 million of whom were unemployed. What were the labor-force participation rate and the
unemployment rate for this group?
a. 60.7% and 3.2%
b. 60.7% and 5.0%
c. 63.9% and 3.2%
d. 63.9% and 5.0%
____ 12.
The Bureau of Labor Statistics reported in 2005 that there were 28.19 million people over age
25 who had no high school degree or its equivalent, 11.73 million of whom were employed and 1.04 million
of whom were unemployed. What were the labor-force participation rate and the unemployment rate for this
group?
a. 45.3% and 3.7%
b. 45.3% and 8.1%
c. 41.6% and 3.7%
d. 41.6% and 8.1%
____ 13.
According to 2009 data on the U.S. population which of the following was correct for people
ages 20 and over?
a. Blacks had higher rates of labor-force participation and lower rates of unemployment
compared to whites.
b. Blacks had higher rates of labor-force participation and higher rates of unemployment
compared to whites.
c. Blacks had similar rates of labor-force participation and lower rates of unemployment
compared to whites.
d. Blacks had similar rates of labor-force participation and higher rates of unemployment
compared to whites.
____ 14.
According to 2009 data on the U.S. population which of the following was correct?
a. Adults had higher labor-force participation rates and higher rates of unemployment
compared to teenagers.
b. Adults had higher labor-force participation rates and lower rates of unemployment
compared to teenagers.
c. Adults had lower labor-force participation rates and lower rates of unemployment
compared to teenagers.
d. Adults had lower labor-force participation rates and higher rates of unemployment
compared to teenagers.
____ 15.
According to 2009 data on the U.S. population, which of the following groups of adults (ages
20 and older) had the highest labor-force participation rate?
a. white males
b. white females
c. black males
d. black females
____ 16.
According to 2009 data on the U.S. population, which of the following groups of adults (ages
20 and older) had the lowest labor-force participation rate?
a. white males
b. white females
c. black males
d. black females
____ 17.
According to 2009 data on the U.S. population, which of the following groups of adults (ages
20 and older) had the highest unemployment rate?
a. white males
b. white females
c. black males
d. black females
____ 18.
According to 2009 data on the U.S. population, which of the following groups of adults (ages
20 and older) had the lowest unemployment rate?
a. white males
b. white females
c. black males
d. black females
____ 19.
According to 2009 data on the U.S. population, which of the following groups of teenagers
(ages 16-19) had the highest labor-force participation rate?
a. white males
b. white females
c. black males
d. black females
____ 20.
According to 2009 data on the U.S. population, which of the following groups of teenagers
(ages 16-19) had the lowest labor-force participation rate?
a. white males
b. white females
c. black males
d. black females
____ 21.
According to 2009 data on the U.S. population, which of the following groups of teenagers
(ages 16-19) had the highest unemployment rate?
a. white males
b. white females
c. black males
d. black females
____ 22.
According to 2009 data on the U.S. population, which of the following groups of teenagers
(ages 16-19) had the lowest unemployment rate?
a. white males
b. white females
c. black males
d. black females
____ 23.
In order, which group has the highest participation rate and which has the higher
unemployment rate?
a. black males, black males
b. black males, white males
c. white males, black males
d. white males, white males
____ 24.
Which of the following is correct?
a. The labor-force participation rate of women has increased in part due to smaller families.
b. The labor-force participation rate of men has decreased in part due to men retiring younger
and living longer.
c. Both a and b are correct.
d. None of the above is correct.
____ 25.
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.
____ 26.
Economists at the Congressional Budget Office estimated that for 2009, the U.S. natural rate
of unemployment was
a. 2.5 percent.
b. 3.0 percent.
c. 5.0 percent.
d. 6.5 percent.
____ 27.
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.
____ 28.
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.
____ 29.
Just after World War II, the labor-force participation rate of women was
a. about 25 percent, and in 2009, it was about 50 percent.
b. about 33 percent, and in 2009 it was about 60 percent.
c. about 50 percent, and in 2009, it was about 70 percent.
d. about 60 percent, and in 2009, it was about 80 percent.
____ 30.
Just after World War II, the labor-force participation rate of men was
a. about 33 percent, and in 2009, it was about 50 percent.
b. about 50 percent, and in 2009, it was about 60 percent.
c. about 65 percent, and in 2009, it was about 60 percent.
d. about 87 percent, and in 2009, it was about 72 percent.
____ 31.
Spells of unemployment end about
a. 1/5 of the time with the person leaving the labor force.
b. 1/4 of the time with the person leaving the labor force.
c. 1/3 of the time with the person leaving the labor force.
d. 1/2 of the time with the person leaving the labor force.
____ 32.
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.
____ 33.
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
____ 34.
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.
____ 35.
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.
____ 36.
People who are unemployed because of job search are best classified as
a. cyclically unemployed.
b. structurally unemployed.
c. frictionally unemployed.
d. discouraged workers.
____ 37.
Which of the following is an explanation for the existence of frictional unemployment?
a. efficiency wages
b. minimum-wage laws
c. unions
d. job search
____ 38.
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.
____ 39.
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.
____ 40.
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
____ 41.
Every month, the Bureau of Labor Statistics surveys 160,000 business establishments to help
determine
a. the number of people unemployed.
b. the number of jobs the economy has gained or lost.
c. the size of the labor force.
d. the number of people who own their own businesses.
____ 42.
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.
____ 43.
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.
____ 44.
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.
____ 45.
Suppose that because of the popularity of the low-carb diet, bakeries need fewer workers and
steak houses need more workers. The unemployment created by this change is
a.
b.
c.
d.
frictional unemployment created by efficiency wages.
frictional unemployment created by sectoral shifts.
structural unemployment created by efficiency wages.
structural unemployment created by sectoral shifts.
____ 46.
Suppose the demand for construction workers increased and the demands for textile and steel
workers diminished. This is an example of
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.
____ 47.
Suppose that consumers choose to smoke less and chew gum more. Tobacco companies cut
back on the number of people they employ while chewing gum manufacturers employ more. This is an
example of
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.
____ 48.
The invention of the telegraph led to the loss of jobs for those who had delivered mail by
horse, but created jobs for telegraph operators and delivery persons. This is an example of
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.
____ 49.
Which of the following is not among the four industries with the largest employment in the
United States today?
a. lumber
b. aircraft
c. communications
d. electrical components
____ 50.
About what percentage of jobs are destroyed every year and about what percentage of
workers leave their jobs in a typical month?
a. 1% and 5%
b. 5% and 1%
c. 3% and 10%
d. 10% and 3%
____ 51.
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.
____
52.
Policies that reduce the time it takes unemployed workers to find new jobs
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.
____ 53.
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.
____ 54.
Government-run employment agencies and public training programs are operated by the
government to try to facilitate job search and reduce unemployment.
a. Almost all economists agree that such programs are of no use.
b. Almost all economists agree that such programs work very well.
c. Some economists claim that the government can do these things no better than firms and
individuals could do them for themselves.
d. Some economists claim that these programs increase frictional unemployment.
____ 55.
Of the following groups, who is eligible for unemployment insurance benefits?
a. the unemployed who quit their jobs
b. the unemployed who were laid off because their previous employers no longer needed
their skills
c. the unemployed who were fired for cause
d. the unemployed who just entered the labor force
____ 56.
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.
____ 57.
Evidence from research studies by economists
a. shows that increased unemployment benefits decrease the job search efforts of the
unemployed.
b. shows that increased unemployment benefits have virtually no effect on the job search
efforts of the unemployed.
c. shows that increased unemployment benefits increase the job search efforts of the
unemployed.
d. is conflicting on what increased unemployment benefits do to the job search efforts of the
unemployed.
____ 58.
More generous unemployment insurance would
a. raise structural unemployment.
b. raise frictional unemployment.
c. lower structural unemployment.
d. lower frictional unemployment.
____ 59.
Economists would predict that, other things the same, the more generous unemployment
compensation a country has,
a. the shorter the duration of each spell of unemployment, and the higher the unemployment
rate.
b. the shorter the duration of each spell of unemployment, and the lower the unemployment
rate.
c. the longer the duration of each spell of unemployment, and the higher the unemployment
rate.
d. the longer the duration of each spell of unemployment, and the lower the unemployment
rate.
____ 60.
Which of the following is correct?
a. Unemployment insurance raises structural unemployment because it reduces the job
search efforts of the unemployed.
b. Most economists are skeptical of the value of unemployment insurance primarily because
they believe that it results in a poorer match between workers and jobs.
c. Studies show that when the unemployed become ineligible for benefits, the probability of
their finding a job rises markedly.
d. All of the above are correct.
____ 61.
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.
____ 62.
Minimum wages create unemployment in markets where they create a
a. shortage of labor. Minimum wage laws are not the predominant reason for
unemployment in the U.S.
b. shortage of labor. Minimum wage laws are the predominant reason for unemployment in
the U.S.
c. surplus of labor. Minimum wage laws are not the predominant reason for unemployment
in the U.S.
d. surplus of labor. Minimum wage laws are the predominant reason for unemployment in
the U.S.
____ 63.
An increase in the minimum wage
a. reduces structural unemployment.
b. reduces frictional unemployment,
c. increases structural unemployment.
d. increases fricitional unemployment.
____ 64.
Which of the following is correct?
a. In the U.S. it is only among the least skilled and least experienced members of the labor
force that minimum-wage laws cause unemployment. Unions may keep wages above their
equilibrium level.
b. In the U.S. it is only among the least skilled and least experienced members of the labor
force that minimum-wage laws cause unemployment. Unions cannot keep wages above
their equilibrium level.
c. In the U.S. minimum-wage laws cause unemployment even for people with high skills and
much experience. Unions may keep wages above their equilibrium level.
d. In the U.S. minimum-wage laws cause unemployment even for people with high skills and
much experience. Unions cannot keep wages above their equilibrium level.
____ 65.
Which of the following is not correct?
a. A union is a worker association that bargains with employers over wages, benefits, and
working conditions.
b. Unions play a much larger role in the U.S. labor market now than they did in the past.
c. Unions play a large role in many European countries.
d. A union is a type of cartel.
____ 66.
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.
____ 67.
Since the 1940’s U.S. union membership has
a. fallen. This decline should have reduced structural unemployment.
b. fallen. This decline should not have reduced structural unemployment.
c. risen. This increase should have raised structural unemployment.
d. risen. This increase should not have raised structural unemployment.
____ 68.
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.
____ 69.
workers?
a. 0 to 5
b. 5 to 10
c. 10 to 20
d. 20 to 30
Economists have found that union workers earn what percent more than similar nonunion
____ 70.
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.
____ 71.
If outsiders had more say in union contracts then it is likely that union wages would be
a. higher so unemployment would be higher.
b. higher so unemployment would be lower.
c. lower so unemployment would be higher.
d. lower so unemployment would be lower.
____ 72.
Unions contribute to
a. cyclical unemployment.
b. frictional unemployment.
c. seasonal unemployment.
d. structural unemployment.
____ 73.
Unions contribute to
a. frictional but not structural unemployment.
b. structural but not frictional unemployment.
c. both frictional and structural unemployment.
d. neither frictional nor structural unemployment.
____ 74.
Unions contribute to
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.
____ 75.
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.
____ 76.
Suppose that computer factory workers and cell phone factory workers have no unions. Now
suppose that cell phone factory workers form unions. What does this do the labor supply of and wages of
workers in computer factories?
a. It increases the labor supply and wages of computer factory workers.
b. It increases the labor supply and decreases the wages of computer factory workers.
c. It decreases the labor supply and increases the wages of computer factory workers.
d. It decreases the labor supply and wages of computer factory workers.
____ 77.
Suppose that furniture factory worker are unionized. If these workers decide not to be
unionized,
a. the quantity of furniture factory workers demanded will rise. The supply of workers in
other industries will also rise.
b. the quantity of furniture factory workers demanded will rise. The supply of workers in
other industries will fall.
c. the quantity of furniture factory workers demanded will fall. The supply of workers in
other industries will rise.
d. the quantity of furniture factory workers demanded will fall. The supply of workers in
other industries will also fall.
____ 78.
The Wagner Act of 1935
a. prevents unions from acting as cartels.
b. allows workers joining a unionized firm to choose not to join the union.
c. prevents employers from interfering when workers try to organize a union.
d. prevents firms from hiring permanent replacements for workers who are on strike.
____ 79.
The National Labor Relations Board
a. enforces antitrust laws against unions.
b. enforces workers' rights to unionize.
c. acts as a union's representative in collective bargaining.
d. is required to approve all collective bargaining agreements before they can be enforced.
____ 80.
Right-to-work laws
a. guarantee workers the right to form unions.
b. give workers in a unionized firm the right to choose whether to join the union.
c. prevent employers from hiring permanent replacements for workers who are on strike.
d. prevent workers from being fired because of increases in wages brought about by
collective bargaining.
____ 81.
In the absence of right-to-work laws, workers
a. that went on strike could be permanently replaced.
b. might be required to join the union if they worked for a unionized firm.
c. would not be able to unionize.
d. would not be able to strike.
____ 82.
Which of the following is correct?
a. There is consensus among economists that unions are good for the economy.
b. There is consensus among economists that unions are bad for the economy.
c. There is consensus among economists that, on net, unions have almost no impact on
macroeconomic variables.
d. There is no consensus among economists about whether unions are good or bad for the
economy.
____ 83.
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.
____ 84.
Efficiency-wage theory suggests that paying
a. low wages might be profitable because they raise the efficiency of a firm’s workers.
b. low wages might be profitable because they lower the efficiency of a firm’s workers.
c. high wages might be profitable because they raise the efficiency of a firm’s workers.
d. high wages might be profitable because they lower the efficiency of a firm’s workers.
____ 85.
Tara, the CEO of a corporation operating in a relatively poor country where wages are low,
decides to raise the wages of her workers even though she faces an excess supply of labor. Her decision
a. might increase profits if it means that the wage is high enough for her workers to eat a
nutritious diet that makes them more productive.
b. will help eliminate the excess supply of labor.
c. may cause her workers to increase shirking.
d. All of the above are correct.
____ 86.
The efficiency-wage theory of worker health is
a. more relevant for explaining unemployment in less developed countries than in rich
countries.
b. more relevant for explaining unemployment in rich countries than in less developed
countries.
c. equally relevant for explaining unemployment in less developed countries and in rich
countries.
d. not relevant for explaining unemployment.
____ 87.
The efficiency-wage theory of worker turnover suggests that firms with higher turnover will
have
a. higher production costs and higher profits.
b. higher production costs and lower profits.
c. lower production costs and higher profits.
d. lower production costs and lower profits.
____ 88.
In the early 1900s, Henry Ford introduced
a. a high-wage policy, and this policy produced many of the effects predicted by efficiencywage theory.
b. a high-wage policy, and this policy produced none of the effects predicted by efficiencywage theory.
c. a low-wage policy, and this policy produced many of the effects predicted by efficiencywage theory.
d. a low-wage policy, and this policy produced none of the effects predicted by efficiencywage theory.
____ 89.
Sectoral changes in demand
a. create frictional unemployment, while firms paying wages above equilibrium to attract a
better pool of candidates creates structural unemployment.
b. create structural unemployment, while firms paying wages above equilibrium to attract a
better pool of candidates creates frictional unemployment.
c. and firms paying wages above equilibrium to attract a better pool of candidates both create
structural unemployment.
d. and firms paying wages above equilibrium to attract a better pool of candidates both create
frictional unemployment.
____ 90.
Minimum-wage laws
a. create frictional unemployment, while firms paying wages above equilibrium to reduce
worker turnover creates structural unemployment.
b. create structural unemployment, while firms paying wages above equilibrium to reduce
worker turnover creates frictional unemployment.
c. and firms paying wages above equilibrium to reduce worker turnover both create
structural unemployment.
d. and firms paying wages above equilibrium to reduce worker turnover both create frictional
unemployment.