Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.
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1.
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A college student who is not working or looking for a job is counted as
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a.
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neither employed nor part of the labor force.
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b.
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unemployed and in the labor force.
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c.
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unemployed, but not in the labor force.
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d.
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employed and in the labor force.
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2.
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In 2004, based on concepts similar to those used to estimate U.S. employment figures, the Canadian adult non-institutionalized population was 25.022 million, the labor force was 16.956 million, and the number of people employed was 15.864 million. According to these numbers, the Canadian labor-force participation rate and unemployment rate were about
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a.
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67.8% and 6.4%
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b.
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67.8% and 4.4%
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c.
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63.4% and 6.4%
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d.
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63.4% and 4.4%
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3.
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The labor-force participation rates among U.S. men since World War II
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a.
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decreased because of longer schooling, an increase in stay-at-home dads, earlier retirement, and longer lives.
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b.
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decreased because of longer lives, laws that prevent mandatory retirement, and an increase in stay-at-home dads.
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c.
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increased because of better unemployment insurance, laws that prevent mandatory retirement, and laws that prevent age discrimination in hiring.
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d.
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increased because of easier job searches, better training, and laws that prevent mandatory retirement and age discrimination in hiring.
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4.
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Suppose that Krameria is considering policy changes that would affect the number of males age 25-54 who are employed and unemployed according to the following table. Statisticians at the Kramerian Labor Department have computed current labor statistics and estimated what the labor statistics would have been with the policy in place. What are the current unemployment and labor-force participation rates, to the nearest tenth? According to the estimates, what would their values have been if the policy had been in place?
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Labor Force Statistics for Krameria Males Age 25-54
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population
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employed
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unemployed
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Current
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120,000
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80,000
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4,000
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If Policy in Place
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120,000
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76,500
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3,500
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a.
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current 4.8 % and 70% with policy change 4.4% and 66.7%
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b.
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current 5% and 70% with policy change 4.6% and 66.7%
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c.
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current 4.8% and 66.7% with policy change 4.4% and 64%
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d.
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current 5% and 66.7% with policy change 4.6% and 64%
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5.
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Suppose that some people are counted as unemployed when, to maintain unemployment compensation, they search for work only at places where they are unlikely to be hired. If these individuals were counted as out of the labor force instead of as unemployed,
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a.
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both the unemployment rate and labor-force participation rate would be higher.
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b.
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both the unemployment rate and labor-force participation rate would be lower.
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c.
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the unemployment rate would be lower and the labor-force participation rate would be higher.
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d.
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the unemployment rate would be higher and the participation rate would be lower.
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6.
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Which of the following is correct?
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a.
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Short-term unemployment is a more serious problem than long-term unemployment.
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b.
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Most spells of unemployment are long term.
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c.
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Most of the currently unemployed have been unemployed a long time.
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d.
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None of the above is correct.
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7.
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Unemployment that exists because it takes time for workers to search for the job that suits them best is
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a.
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frictional unemployment, which partly accounts for the natural rate of unemployment.
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b.
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frictional unemployment, which does not help account for the natural rate of unemployment.
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c.
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structural unemployment, which partly accounts for the natural rate of unemployment.
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d.
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structural unemployment, which does not help account for the natural rate of unemployment.
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8.
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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 accounts doesnt appear to be falling, there seems to be more people applying than jobs available.
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a.
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John and Curtis are both frictionally unemployed.
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b.
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John and Curtis are both structurally unemployed.
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c.
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John is frictionally unemployed, and Curtis is structurally unemployed.
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d.
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John is structurally unemployed, and Curtis is frictionally unemployed.
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9.
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In 2002, the demand for construction workers increased and the demands for textile and steel workers diminished. This illustrates
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a.
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frictional unemployment created by a sectoral shift.
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b.
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structural unemployment created by a sectoral shift.
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c.
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frictional unemployment created by efficiency wages.
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d.
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structural unemployment created by efficiency wages.
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10.
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Which of the following is not correct?
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a.
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Frictional unemployment is inevitable in a dynamic economy.
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b.
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Although the unemployment created by sectoral shifts is unfortunate, in the long run such changes lead to higher productivity and higher living standards.
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c.
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The huge increase in imported goods has had little effect on long-run U.S. employment.
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d.
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The minimum wage is not passed on to consumers and does not decrease employment.
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11.
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Unemployment insurance
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a.
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reduces search effort and raises unemployment.
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b.
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reduces search effort and lowers unemployment.
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c.
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increases search effort and raises unemployment.
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d.
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increases search effort and decreases unemployment.
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12.
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Why would a person remain unemployed for many years even during prosperous times?
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a.
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He is most likely not really willing to work.
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b.
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He is incapacitated and is unable to work.
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c.
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He has a bad work record from his previous jobs.
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d.
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The minimum wage plus taxes on labor are higher than his productivity, and he is prevented from peddling goods in the street by legal restrictions.
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13.
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Julia Mlanchko was looking for a job for a year, and was rejected by all companies she applied to, and finally gave up searching, although if offerd a job, she would take it.
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a.
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she is unemployed, since she would accept a job.
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b.
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she is not unemployed, since discouraged workers are not counted as unemployed.
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c.
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she may or may not be unemployed.
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d.
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she is officially counted as unemployed, even though in reality she is not in the labor force.
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