Question 1

Use the following to answer questions :
Figure: The Effect of a Minimum Wage F. Structural unemployment will equal: A) QS - QD. B) QE - QD. C) QS - QE. D) zero." class="answers-bank-image d-inline" rel="preload" >
-(Figure: The Effect of a Minimum Wage)  Look at the figure The Effect of a Minimum Wage. Suppose the labor market is in equilibrium at E when the government imposes a minimum wage of WF. Structural unemployment will equal:

Accepted Answer

A)  QS - QD.
B)  QE - QD.
C)  QS - QE.
D)  zero.E) B) and D)
F) B) and C)

Question 2

All of the following cause structural unemployment EXCEPT:

Accepted Answer

A)  a government-mandated floor on the price of labor set above the equilibrium wage.
B)  collective bargaining efforts that secure higher wages for unionized workers than for nonunionized workers.
C)  offering high wages to attract high-quality workers.
D)  granting Social Security benefits to laid-off workers.E) C) and D)
F) B) and D)

Question 3

The labor force is the total:

Accepted Answer

A)  number of people employed.
B)  population.
C)  number of people in the population of working age.
D)  number of people who are employed or unemployed.E) B) and C)
F) A) and D)

Question 4

The unemployment rate is the:

Accepted Answer

A)  percent of the labor force that is unemployed.
B)  number of people unemployed.
C)  the labor force minus the number of people unemployed.
D)  average length of time someone is unemployed.E) None of the above
F) A) and C)

Question 5

Which of the following statements is FALSE?

Accepted Answer

A)  Both frictional and structural unemployment can occur even if unemployment is at its natural level.
B)  Cyclical unemployment is unemployment in excess of the natural rate.
C)  A new college graduate looking for that first professional job may be frictionally unemployed.
D)  Efficiency wages may cause frictional unemployment.E) B) and C)
F) A) and B)

Question 6

Discouraged workers:

Accepted Answer

A)  are getting paid too little.
B)  do not like their job.
C)  are working part-time but are looking for a full-time job.
D)  have given up looking for a job.E) A) and D)
F) B) and D)

Question 7

Counted among the unemployed are underemployed people, who cannot find a job working as many hours as they wish.

Accepted Answer

A) True 
 B)False

Question 8

Unemployment rates tend to decrease when:

Accepted Answer

A)  the economy expands.
B)  discouraged workers become active job seekers.
C)  underemployed workers become unemployed.
D)  the economy contracts.E) None of the above
F) A) and B)

Question 9

Unanticipated inflation:

Accepted Answer

A)  reduces the value of money.
B)  increases the value of future obligations.
C)  increases certainty about the future.
D)  helps lenders.E) A) and B)
F) A) and C)

Question 10

The unemployment rate equals the number _____ divided by the number _____ times 100.

Accepted Answer

A)  unemployed; employed
B)  unemployed; population
C)  employed; labor force
D)  unemployed; labor forceE) A) and C)
F) A) and B)

Question 11

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its labor force is:

Accepted Answer

A)  335 million.
B)  200 million.
C)  155 million.
D)  150 million.E) C) and D)
F) All of the above

Question 12

One factor that reduces the natural rate of unemployment is:

Accepted Answer

A)  a binding minimum wage.
B)  the recent proliferation of temporary employment agencies.
C)  a slowdown in productivity growth.
D)  government policies such as those that produced Eurosclerosis.E) A) and C)
F) A) and D)

Question 13

The real interest rate is the nominal interest rate less the rate of inflation.

Accepted Answer

A) True 
 B)False

Question 14

Use the following to answer questions :
Table: Price Levels
 
-(Table: Price Levels)  Look at the table Price Levels. What is the rate of inflation from 2011 to 2012?

Accepted Answer

A)  0%
B)  2.9%
C)  4.5%
D)  6.4%E) A) and D)
F) B) and D)

Question 15

A survey reveals that on a small island 1,000 people have jobs, 250 people are unemployed and looking for jobs, and 450 people are neither working nor looking for work. The unemployment rate on the island is:

Accepted Answer

A)  20%.
B)  25%.
C)  45%.
D)  15.6%.E) None of the above
F) A) and C)

Question 16

A jobless recovery occurs when GDP is growing at a below-average rate and unemployment is rising.

Accepted Answer

A) True 
 B)False

Question 17

Structural unemployment means there are:

Accepted Answer

A)  more people seeking work than there are jobs.
B)  more jobs than workers.
C)  wages that are too low.
D)  people just entering the labor force.E) C) and D)
F) None of the above

Question 18

A minimum wage of $7.25 per hour can cause structural unemployment if the equilibrium wage is:

Accepted Answer

A)  $7.25.
B)  $8.00.
C)  $6.85.
D)  $7.30.E) None of the above
F) A) and B)

Question 19

An efficiency wage:

Accepted Answer

A)  can be secured only with the help of a labor union.
B)  is one that causes greater frictional unemployment.
C)  is offered by an employer to encourage workers to work harder.
D)  results in a less productive work force.E) A) and B)
F) A) and C)

Question 20

For most of U.S. modern economic history, when the unemployment rate is _____, real GDP is _____.

Accepted Answer

A)  falling; rising
B)  falling; falling
C)  rising; unchanged
D)  rising; risingE) A) and B)
F) All of the above

Exam 8: Unemployment and Inflation

Use the following to answer questions : Figure: The Effect of a Minimum Wage -(Figure: The Effect of a Minimum Wage) Look at the figure The Effect of a Minimum Wage. Suppose the labor market is in equilibrium at E when the government imposes a minimum wage of WF. Structural unemployment will equal:

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All of the following cause structural unemployment EXCEPT:

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Unemployment rates tend to decrease when:

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One factor that reduces the natural rate of unemployment is:

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Discouraged workers:

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A survey reveals that on a small island 1,000 people have jobs, 250 people are unemployed and looking for jobs, and 450 people are neither working nor looking for work. The unemployment rate on the island is:

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Use the following to answer questions : Table: Price Levels -(Table: Price Levels) Look at the table Price Levels. What is the rate of inflation from 2011 to 2012?

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If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its labor force is:

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A minimum wage of $7.25 per hour can cause structural unemployment if the equilibrium wage is:

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The labor force is the total:

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The unemployment rate equals the number _____ divided by the number _____ times 100.

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For most of U.S. modern economic history, when the unemployment rate is _____, real GDP is _____.

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Unanticipated inflation:

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Which of the following statements is FALSE?

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The unemployment rate is the:

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Counted among the unemployed are underemployed people, who cannot find a job working as many hours as they wish.

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An efficiency wage:

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A jobless recovery occurs when GDP is growing at a below-average rate and unemployment is rising.

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Structural unemployment means there are:

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The real interest rate is the nominal interest rate less the rate of inflation.

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The unemployment rate equals the number _ divided by the number _ times 100.

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For most of U.S. modern economic history, when the unemployment rate is _, real GDP is _.

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