Question 1

The natural rate of unemployment is

Accepted Answer

A)  zero since everyone who is unemployed is voluntarily unemployed
B)  determined in part by labor market frictions as people changes careers, etc.
C)  rarely more than 3 percent
D)  the amount of unemployment caused by an average recession
E)  generally the result of misguided government policy

Question 2

Assume the share of whites in the labor force is 86% and their unemployment rate is 6%; the share of non-whites in the labor force is 14% with an unemployment rate of 11%.What is the overall unemployment rate?

Accepted Answer

A)  6) 3%
B)  6) 7%
C)  7) 4%
D)  8) 2%
E)  8) 5%

Question 3

Assume adult males have a 47% share of the work force and their unemployment rate is 8.6%, adult females have a share of 45% and their unemployment rate is 8.4%, and teenagers have a share of 8% and their unemployment rate is 21%.Approximately what is the overall unemployment rate?

Accepted Answer

A)  9) 0%
B)  9) 5%
C)  9) 8%
D)  10.2%
E)  10.4%

Question 4

In which of the following periods did the U.S.economy NOT experience a recession?

Accepted Answer

A)  1974/75
B)  1981/82
C)  1987/88
D)  2001-02
E)  2007-09

Question 5

Unemployment hysteresis refers to the fact that

Accepted Answer

A)  high rates of unemployment tend to perpetuate themselves
B)  when unemployed, individuals reduce their consumption, causing firms to lay off more workers and therefore cyclical unemployment increases even more
C)  individuals who experience long spells of unemployment often get desperate and take jobs for which they are overqualified
D)  politicians often react irrationally to news of high unemployment and stimulate the economy causing unnecessary political cycles
E)  none of the above

Question 6

Which of the following is FALSE for the unemployed in the United States?

Accepted Answer

A)  in 2000, over 50 percent remained unemployed for less than 15 weeks
B)  in 2000, less than 12 percent remained unemployed for more than 27 weeks
C)  in 2009, less than 50 percent remained unemployed for less than 15 weeks
D)  in 2009, over 40 percent remained unemployed for more than 27 weeks
E)  in 2009, over 60 percent remained unemployed for less than 27 weeks

Question 7

Which of the following does NOT affect the duration of unemployment?

Accepted Answer

A)  the availability of unemployment benefits
B)  the rate at which new workers enter the work force
C)  the demographic make-up of the labor force
D)  the organization of the labor market
E)  none of the above B

Question 8

Generous unemployment benefits may actually lead to an increase in the measured rate of unemployment since

Accepted Answer

A)  people who are not really looking for jobs may report themselves as unemployed to collect unemployment benefits
B)  receiving unemployment benefits reduces the opportunity costs of looking for a better job even after a job offer may have been made
C)  firms are more likely to lay off workers knowing that the consequences of being unemployed are not too severe
D)  unemployment benefits increase the replacement ratio and that, in turn, affects the reservation wage
E)  all of the above

Question 9

Over the last five decades, the natural rate of unemployment has

Accepted Answer

A)  always been around 4%
B)  declined from about 5.5% in the 1950s to about 4% in 2009
C)  changed as the composition of the labor force has changed
D)  consistently declined as more women entered the labor force
E)  increased from 3% in the 1950s to 8% in the 1980s, but decreased ever since

Question 10

The natural rate of unemployment will most likely increase if

Accepted Answer

A)  the minimum wage rate is decreased
B)  unemployment benefits are increased
C)  monetary growth is decreased
D)  income taxes are increased
E)  all of the above

Question 11

Assume the unemployment rates among different groups in the labor force are as follows: adult males 10%, adult females 8%, and teenagers 18%.Teenagers account for 10% of the total labor force, while women account for 45% of the adult labor force.What is the actual unemployment rate nationwide?

Accepted Answer

A)  9) 7%
B)  9) 8%
C)  9) 9%
D)  10.2%
E)  10.9%

Question 12

The relationship between job vacancies and the unemployment rate is called

Accepted Answer

A)  the Beveridge curve
B)  the original Phillips curve
C)  the augmented Phillips curve
D)  Okun's law
E)  none of the above A

Question 13

Roughly how large was the working-age population (16 years or older)  in the U.S.in 2011?

Accepted Answer

A)  315 million
B)  306 million
C)  240 million
D)  140 million
E)  86 million C

Question 14

Assume that the share of whites in the labor force is 85% and their unemployment rate is 10% and that the share of non-whites in the labor force is 15% and their unemployment rate is 14%.What is the overall unemployment rate?

Accepted Answer

A)  12.4%
B)  12.0%
C)  11.6.4%
D)  10.6%
E)  10.4%

Question 15

In 2009, the high unemployment rate in the U.S.caused a loss in real GDP of roughly

Accepted Answer

A)  $68 billion
B)  $168 billion
C)  $680 billion
D)  $1,168 billion
E)  none of the above

Question 16

Assume the unemployment rates among different groups in the labor force are as follows: teenagers 21%, males 8.5%, adult females 8.6%.Teenagers account for 8% of the total labor force, while men account for 56% of the total labor force.What is the actual unemployment rate nationwide?

Accepted Answer

A)  7) 8%
B)  8) 2%
C)  8) 6%
D)  9) 0%
E)  9) 4%

Question 17

The natural rate of unemployment can be reduced by

Accepted Answer

A)  expansionary monetary policies, but this would create more inflation
B)  expansionary fiscal policies, such as an income tax decrease
C)  restrictive fiscal policies designed to balance the federal budget
D)  training and skills programs that focus on teenagers and the long-term unemployed
E)  none of the above

Question 18

An employed person is defined as a person who during a reference week

Accepted Answer

A)  had a job but was not working due to family or personal reasons
B)  had a job but was not working due to maternity or paternity leave
C)  did at least one hour of work as a paid employee
D)  all of the above
E)  none of the above

Question 19

When we look at unemployment in the United States, which of the following statements is most accurate?

Accepted Answer

A)  flows into and out of the unemployment pool tend to be fairly small relative to the actual number of unemployed
B)  variations in the unemployment rates are fairly small across groups defined by age, gender, or race
C)  the average duration of unemployment for the majority of unemployed tends to be more than half a year long
D)  the average duration of unemployment was higher in the period of between 1975 and 1985 than it was between 1995 and 2005
E)  the unemployment rates during the recessions of 1981/82 and 2001/02 were lower than the rate during the Great Recession of 2007-09

Question 20

In a "jobless recovery,"

Accepted Answer

A)  no new jobs are created during a recession or in the early stages of recovery
B)  firms do not hire new workers until they see the economy has recovered from the recession
C)  unemployment must go back to its natural rate before the upswing can start
D)  there is a lag between GDP growth and a drop in unemployment
E)  none of the above

Exam 7: Unemployment

The natural rate of unemployment is

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Assume the share of whites in the labor force is 86% and their unemployment rate is 6%; the share of non-whites in the labor force is 14% with an unemployment rate of 11%.What is the overall unemployment rate?

Correct AnswerverifiedShow Answer

Assume adult males have a 47% share of the work force and their unemployment rate is 8.6%, adult females have a share of 45% and their unemployment rate is 8.4%, and teenagers have a share of 8% and their unemployment rate is 21%.Approximately what is the overall unemployment rate?

Correct AnswerverifiedShow Answer

In which of the following periods did the U.S.economy NOT experience a recession?

Correct AnswerverifiedShow Answer

Unemployment hysteresis refers to the fact that

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Which of the following is FALSE for the unemployed in the United States?

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Which of the following does NOT affect the duration of unemployment?

Correct AnswerverifiedB

Generous unemployment benefits may actually lead to an increase in the measured rate of unemployment since

Correct AnswerverifiedShow Answer

Over the last five decades, the natural rate of unemployment has

Correct AnswerverifiedShow Answer

The natural rate of unemployment will most likely increase if

Correct AnswerverifiedShow Answer

Assume the unemployment rates among different groups in the labor force are as follows: adult males 10%, adult females 8%, and teenagers 18%.Teenagers account for 10% of the total labor force, while women account for 45% of the adult labor force.What is the actual unemployment rate nationwide?

Correct AnswerverifiedShow Answer

The relationship between job vacancies and the unemployment rate is called

Correct AnswerverifiedA

Roughly how large was the working-age population (16 years or older) in the U.S.in 2011?

Correct AnswerverifiedC

Assume that the share of whites in the labor force is 85% and their unemployment rate is 10% and that the share of non-whites in the labor force is 15% and their unemployment rate is 14%.What is the overall unemployment rate?

Correct AnswerverifiedShow Answer

In 2009, the high unemployment rate in the U.S.caused a loss in real GDP of roughly

Correct AnswerverifiedShow Answer

Assume the unemployment rates among different groups in the labor force are as follows: teenagers 21%, males 8.5%, adult females 8.6%.Teenagers account for 8% of the total labor force, while men account for 56% of the total labor force.What is the actual unemployment rate nationwide?

Correct AnswerverifiedShow Answer

The natural rate of unemployment can be reduced by

Correct AnswerverifiedShow Answer

An employed person is defined as a person who during a reference week

Correct AnswerverifiedShow Answer

When we look at unemployment in the United States, which of the following statements is most accurate?

Correct AnswerverifiedShow Answer

In a "jobless recovery,"

Correct AnswerverifiedShow Answer

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A

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C

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