Term
True or False?
The unemployment rate is the percentage of the population that is unemployed. |
|
Definition
FALSE.
The unemployment rate is the percentage of the labor force that is unemployed. |
|
|
Term
A person must be at least _____ years old for the Bureau of Labor Statistics to classify that person as an adult who is
part of the working-age population.
1. 14
2. 16
3. 18
4. 21 |
|
Definition
|
|
Term
True or False?
Bernie works part-time in his family's business, so the Bureau of Labor Statistics would categorize Bernie as not in
the labor force. |
|
Definition
FALSE.
The Bureau of Labor Statistics would categorize Bernie as employed. |
|
|
Term
True or False?
Suzie did not work last week because her place of employment was closed for repairs due to tornado damage, so
the Bureau of Labor Statistics would categorize Suzie as unemployed. |
|
Definition
FALSE.
The Bureau of Labor Statistics would categorize Suzie as employed. |
|
|
Term
True or False?
Chet graduated from college in May and is waiting for his new job to start in July, so the Bureau of Labor Statistics
would categorize Chet as employed. |
|
Definition
FALSE.
The Bureau of Labor Statistics would categorize Chet as unemployed. |
|
|
Term
True or False?
Leda is a homemaker, so the Bureau of Labor Statistics would categorize Leda as unemployed. |
|
Definition
FALSE.
The Bureau of Labor Statistics would categorize Leda as not in the labor force. |
|
|
Term
True or False?
Charlie and Mac both lost their jobs in June 2009. Both men are available for work. Charlie last looked for work six
weeks ago, while Mac last looked for work two weeks ago. The Bureau of Labor Statistics would categorize both
Charlie and Mac as unemployed. |
|
Definition
FALSE.
The Bureau of Labor Statistics would categorize Charlie as not in the labor force and Mac as
unemployed. |
|
|
Term
True or False?
As of August 1, 2011, the U.S. civilian labor force participation rate was 64.0%. |
|
Definition
|
|
Term
True or False?
Since 1948, the U.S. labor force participation rate of adult men has decreased. |
|
Definition
|
|
Term
True or False?
As of August 1, 2011, the U.S. civilian unemployment rate was 9.1%. |
|
Definition
|
|
Term
True or False?
The following list is in order from highest U.S. unemployment rate to lowest U.S. unemployment rate: blacks,
Hispanics (of any race), Asians, whites. |
|
Definition
FALSE.
The following list is in order from highest U.S. unemployment rate to lowest U.S. unemployment
rate: blacks, Hispanics (of any race), whites, Asians. |
|
|
Term
True or False?
The U.S. unemployment rates of men and women are usually similar. |
|
Definition
|
|
Term
In Wrexington in 1975, the working-age population was 100,000 adults, the labor force participation rate was
60%, and 52,800 adults were employed. What was the unemployment rate in Wrexington in 1975? |
|
Definition
12
labor force participation rate = (labor force/working-age population)(100%)
60% = (labor force/100,000)(100%)
0.6 = labor force/100,000
60,000 adults = labor force
labor force = employed + unemployed
60,000 = 52,800 + unemployed
7200 = unemployed
unemployment rate = (unemployed/labor force)(100%) = (7200/60,000)(100%) = 12% |
|
|
Term
In Wrexington in 1985, the working-age population was 200,000 adults, 100,000 adults were employed, and
40,000 adults were unemployed. What was the labor force participation rate in Wrexington in 1985? |
|
Definition
70
labor force = employed + unemployed = 100,000 adults + 40,000 adults = 140,000 adults
labor force participation rate = (labor force/working-age population)(100%) = (140,000/200,000)(100%) = 70% |
|
|
Term
True or False?
Because of the way the Bureau of Labor Statistics categorizes underemployed and discouraged workers, the
unemployment rate reported by the BLS overstates the true degree of joblessness in the economy. |
|
Definition
FALSE.
Because of the way the Bureau of Labor Statistics categorizes underemployed and discouraged
workers, the unemployment rate reported by the BLS understates the true degree of joblessness in the
economy. |
|
|
Term
True or False?
Iggy has a Ph.D. in physics and wants to work as a physicist, but the only job he could find was restocking shelves
at Walmart. The Bureau of Labor Statistics would categorize Iggy as unemployed. |
|
Definition
FALSE.
The Bureau of Labor Statistics would categorize Iggy as employed. |
|
|
Term
Which of the following can be positive, negative, or zero?
1. the unemployment rate
2. the structural unemployment rate
3. the natural rate of unemployment
4. the frictional unemployment rate
5. the cyclical unemployment rate
6. More than one of the above can be positive, negative, or zero. |
|
Definition
| 5. the cyclical unemployment rate |
|
|
Term
True or False?
Quinn quit her job to search for a better one, so Quinn is frictionally unemployed. |
|
Definition
|
|
Term
True or False?
Some frictional unemployment is good for an economy. |
|
Definition
TRUE.
Frictional unemployment represents workers and firms taking the time necessary to ensure a good
match between the attributes of workers and the characteristics of jobs, which leads to higher productivity and
GDP. |
|
|
Term
True or False?
Structural unemployment includes people who lost jobs because their job skills were no longer needed by their
employer. |
|
Definition
|
|
Term
True or False?
In January 2011, the U.S. Congressional Budget Office estimated the natural rate of unemployment to be 5.2%. |
|
Definition
|
|
Term
True or False?
When an economy is at full employment, the unemployment rate is zero. |
|
Definition
FALSE.
When an economy is at full employment, the unemployment rate is equal to the natural rate of
unemployment, which is positive. |
|
|
Term
In Wrexington in 1995, the frictional unemployment rate was 3%, the structural unemployment rate was 4%, and
the unemployment rate was 5%. What was the natural rate of unemployment in Wrexington in 1995? |
|
Definition
7
natural rate of unemployment = frictional unemployment rate + structural unemployment rate = 3% + 4% = 7% |
|
|
Term
In Wrexington in 2005, the frictional unemployment rate was 2%, the structural unemployment rate was 6%, and
the unemployment rate was 11%. What was the cyclical unemployment rate in Wrexington in 2005? |
|
Definition
3
natural rate of unemployment = frictional unemployment rate + structural unemployment rate = 2% + 6% = 8%
cyclical unemployment rate = unemployment rate - natural rate of unemployment = 11% - 8% = 3% |
|
|
Term
True or False?
Government job search programs, government worker retraining programs, and government unemployment
insurance all reduce the level of unemployment in an economy. |
|
Definition
FALSE.
Government job search programs and worker retraining programs reduce the level of
unemployment in an economy, but government unemployment insurance increases the level of
unemployment in an economy. |
|
|
Term
At the equilibrium wage of $5, the quantity of labor demanded is 300 and the quantity of labor supplied is 300.
At the minimum wage of $8, the quantity of labor demanded is 250 and the quantity of labor supplied is 350. The
quantity of labor unemployed at the minimum wage is _____. |
|
Definition
100
quantity of labor unemployed = quantity of labor supplied - quantity of labor demanded = 350 - 250 = 100 |
|
|
Term
True or False?
The effects of the minimum wage and labor unions on the U.S. unemployment rate are fairly small. |
|
Definition
|
|
Term
True or False?
Firms pay efficiency wages because they are required by law to do so. |
|
Definition
FALSE.
Firms voluntarily pay efficiency wages to increase worker productivity. |
|
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