Question 1

One way a government can attempt to minimize the effects of structural unemployment is to:

Accepted Answer

A)   subsidize retraining programs.
B)   increase unemployment benefits.
C)   mandate that employers cannot fire any employees.
D)   regulate the wage rate.E) A) and B)
F) C) and D)

Question 2

Suke used to be a music teacher at a local high school, but got let go last year due to budget cuts. Suke now works part-time as a waitress while looking for another teaching job. Suke is:

Accepted Answer

A)   frictionally unemployed.
B)   underemployed.
C)   structurally unemployed.
D)   real-wage unemployed.E) B) and D)
F) B) and C)

Question 3

While working as a sales rep for a local firm, Felipe completes an MBA by taking online college courses at night. Felipe then quits his job to look for a management position at another firm. Felipe is:

Accepted Answer

A)   underemployed.
B)   frictionally unemployed.
C)   structurally unemployed.
D)   classically unemployed.E) A) and B)
F) All of the above

Question 4

If the minimum wage is set below the equilibrium wage, the minimum wage:

Accepted Answer

A)   will have a large effect on the market.
B)   is nonbinding.
C)   would interfere with the market reaching equilibrium.
D)   will likely affect government jobs more than any other job market.E) B) and C)
F) None of the above

Question 5

Some economists argue that the minimum wage:

Accepted Answer

A)   leads some employers to pay workers cash and not report this labor to the government.
B)   causes an increase in the quantity of labor demanded.
C)   should only apply to government workers.
D)   is more important to workers in rural areas.E) All of the above
F) C) and D)

Question 6

Cyclical unemployment tends to move alongside:

Accepted Answer

A)   the per capita GDP growth rate.
B)   nominal GDP.
C)   the inflation rate.
D)   the GDP deflator.E) None of the above
F) A) and D) A

Question 7

Unemployment rates tend to be highest during periods of:

Accepted Answer

A)   recession.
B)   expansion.
C)   recovery.
D)   stagflation.E) A) and D)
F) B) and C) A

Question 8

What affect does unemployment insurance have on the job search?

Accepted Answer

A)   It may prolong the job search, but it also increases the chance that an unemployed worker will find gainful employment.
B)   It may shorten the job search, but it also increases the number of times a person will switch careers.
C)   It does not affect the length of the job search, but it may decrease the number of times a person will switch careers.
D)   It does not affect the length of the job search, but it does decrease the chance that an employed worker will find gainful employment.E) A) and B)
F) B) and C)

Question 9

Unemployment is a:

Accepted Answer

A)   leading indicator, because the business cycle follows it.
B)   lagging indicator, because the business cycle follows it.
C)   leading indicator, because it follows the business cycle.
D)   lagging indicator, because it follows the business cycle.E) B) and C)
F) A) and D)

Question 10

The table shown displays employment statistics for two years.  In which year was the labor force participation rate the lowest?

Accepted Answer

A)   2016
B)   2017
C)   2018
D)   2019E) A) and D)
F) All of the above

Question 11

During times of recession, the labor force participation rate typically:

Accepted Answer

A)   rises, as labor demand increases during a recession.
B)   rises, as more incomes per household are needed to make ends meet.
C)   falls, as more people give up and stop looking for work.
D)   stays roughly the same, as people make decisions about work independent of the overall health of the economy.E) A) and B)
F) B) and D)

Question 12

What happens when an economy starts to contract?

Accepted Answer

A)   Labor demand will increase.
B)   Cyclical unemployment will decrease.
C)   Wages will approach the market-clearing level.
D)   Labor supply will decrease.E) A) and D)
F) B) and C) D

Question 13

When the economy is going strong:

Accepted Answer

A)   firms expand their operations.
B)   the demand for labor decreases.
C)   GDP growth is negative.
D)   firms tend to lay off workers.E) A) and B)
F) None of the above

Question 14

Labor unions are groups of employees who:

Accepted Answer

A)   join together to bargain with their employer(s)  over salaries and work conditions.
B)   join together to create fair employment packages for employees within a certain geographical area.
C)   petition the government to regulate the safety conditions of certain industries.
D)   petition the government to oversee the employment conditions of employees in other countries.E) None of the above
F) All of the above

Question 15

Sonia has a BA in art history and is currently working full-time as a waitress. The BLS would classify Sonia as:

Accepted Answer

A)   employed.
B)   underemployed.
C)   unemployed.
D)   a discouraged worker.E) A) and D)
F) A) and B)

Question 16

The labor supply curve:

Accepted Answer

A)   is made up of firms who want to hire workers at each given wage.
B)   is made up of workers who want to work for firms at each given wage.
C)   shows the number of firms that are willing and able to hire workers at each given wage.
D)   shows that the number of firms that want to hire workers decreases as the wage increases.E) None of the above
F) A) and D)

Question 17

Setting the minimum wage above the equilibrium wage:

Accepted Answer

A)   will have no effect on the market.
B)   will cause the minimum wage to be nonbinding.
C)   could cause unemployment.
D)   All of these are true.E) A) and B)
F) A) and C)

Question 18

Classical unemployment can be caused by:

Accepted Answer

A)   minimum wage laws.
B)   union bargaining.
C)   efficiency wages.
D)   All these cause classical unemployment.E) B) and C)
F) A) and B)

Question 19

If minimum wage legislation does not cause unemployment, then:

Accepted Answer

A)   minimum wage workers will benefit.
B)   firms will earn higher profits.
C)   the minimum wage must have been set above the equilibrium wage in the labor market.
D)   the government should increase unemployment benefits.E) B) and C)
F) C) and D)

Question 20

An increase in GDP growth would likely cause the labor _______ curve to shift to the _______.

Accepted Answer

A)   demand; left
B)   demand; right
C)   supply; left
D)   supply; rightE) C) and D)
F) All of the above

Exam 9: Unemploymentand the Labor Market

One way a government can attempt to minimize the effects of structural unemployment is to:

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Suke used to be a music teacher at a local high school, but got let go last year due to budget cuts. Suke now works part-time as a waitress while looking for another teaching job. Suke is:

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While working as a sales rep for a local firm, Felipe completes an MBA by taking online college courses at night. Felipe then quits his job to look for a management position at another firm. Felipe is:

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If the minimum wage is set below the equilibrium wage, the minimum wage:

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Some economists argue that the minimum wage:

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Cyclical unemployment tends to move alongside:

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Unemployment rates tend to be highest during periods of:

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What affect does unemployment insurance have on the job search?

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Unemployment is a:

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The table shown displays employment statistics for two years. In which year was the labor force participation rate the lowest?

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During times of recession, the labor force participation rate typically:

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What happens when an economy starts to contract?

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When the economy is going strong:

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Labor unions are groups of employees who:

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Sonia has a BA in art history and is currently working full-time as a waitress. The BLS would classify Sonia as:

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The labor supply curve:

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Setting the minimum wage above the equilibrium wage:

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Classical unemployment can be caused by:

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If minimum wage legislation does not cause unemployment, then:

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An increase in GDP growth would likely cause the labor _______ curve to shift to the _______.

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An increase in GDP growth would likely cause the labor _ curve to shift to the _.

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