4. The statistics and data on unemployment are gathered and reported: A) daily. B) weekly. C) monthly. D) yearly.

Transcription

1 Exam 1 inclass review for exam 1 (2) 1. To be counted as unemployed, one must: A) have had a job previously. B) be out of work and be actively looking for a job. C) have had a job before and be actively looking for work. D) be actively looking for a job and have at least a high-school diploma or its equivalent. 2. If a country has a working-age population of 200 million, 120 million people with jobs, and 30 million people unemployed and seeking employment, then its unemployment rate is: A) 5%. B) 7.5%. C) 15%. D) 20%. 3. To be classified as unemployed, a person must be: A) not working. B) not working and actively looking for a job in the last four weeks. C) not working or working part-time when he or she wishes to be working full time. D) not working and actively looking for a job in the last four weeks or discouraged and not actually looking for a job. 4. The statistics and data on unemployment are gathered and reported: A) daily. B) weekly. C) monthly. D) yearly. 5. You are a college student and not working or looking for work. You are: A) unemployed. B) in the labor force but not employed. C) not part of the labor force. D) not described by any of the above. Page 1

2 6. A survey reveals that on a small island 40 people have jobs, 10 people are looking for jobs, and 30 people are neither working nor looking for work. The unemployment rate on the island is: A) 12.5%. B) 20%. C) 25%. D) 50%. 7. A survey reveals that on a small island initially 1,000 people have jobs, 250 people are looking for jobs, and 450 people are neither working nor looking for work. Suppose that 150 of the 450 people who weren't looking for work now begin looking for work. There are now 400 people looking for work and 1,000 people working. What happens to the unemployment rate? A) It falls to 20%. B) It rises to 28.6%. C) It rises to 50%. D) Nothing happens to the unemployment rate, because these people weren't working before and they aren't working now. 8. Suppose there are 70 million people in the labor force, of whom 60 million are employed. The unemployment rate is: A) 7%. B) 10%. C) 14.28%. D) impossible to calculate. 9. If the labor force includes 100 million workers and 5 million people are unemployed but actively seeking work, then the unemployment rate is: A) 1%. B) 5%. C) 10%. D) 95%. Use the following to answer questions 10-11: Page 2

3 10. (Table: Labor Force Data) Using the data from the accompanying table, suppose the labor force participation rate is 70%. The labor force is equal to: A) 1,200 million. B) 50 million. C) 105 million. D) 400 million. 11. (Table: Labor Force Data) Using the data from the accompanying table, suppose the labor force participation rate is 70%. The number of unemployed adults is: A) 8 million. B) 53 million. C) 103 million. D) 50 million. 12. If a country has a working-age population of 200 million, 135 million people with jobs, 10 million people who were looking for a job but have given up, and 5 million people unemployed and seeking employment, then the number of discouraged workers is: A) 25 million. B) 15 million. C) 10 million. D) 5 million. 13. Donna was laid off by her employer at the beginning of She looked for a job for three months, but could not find anything suitable. She then decided to volunteer for a soup kitchen and stopped looking for a job. Donna is considered to be: A) unemployed. B) underemployed. C) a discouraged worker. D) a part-time worker. 14. Jim has a part-time job and would prefer to have a full-time job but has been unable to find full-time work. Jim is classified as: A) a discouraged worker. B) an underemployed worker. C) an unemployed worker. D) out of the labor force. Page 3

4 Use the following to answer questions 15-16: 15. (Table: Population Data for Estill County) Use the accompanying table, which summarizes the labor market status of the residents of Estill County. What is the labor force participation rate in the county? A) 64% B) 81% C) 17% D) 79% 16. (Table: Population Data for Estill County) Use the accompanying table, which summarizes the labor market status of the residents of Estill County. How many people are in the labor force in the county? A) 6,000 B) 9,400 C) 7,400 D) 6, All of the following are examples of job search EXCEPT: A) attending class at a community college to learn database management. B) sitting at a coffee shop while reading the employment section of the local newspaper. C) calling a former college roommate to see if there are any job openings in her company. D) visiting a former college professor to learn about potential work as a research assistant. Page 4

5 18. Unemployment that occurs because it takes workers and employees time to find each other is called: A) cyclical unemployment. B) structural unemployment. C) frictional unemployment. D) discouraged unemployment. 19. Structural unemployment is: A) unemployment that results when there are more people seeking jobs than there are jobs available at the current wage rate. B) unemployment experienced by those entering the labor force for the first time. C) zero when the economy is in full employment. D) caused by short-run economic fluctuations. 20. An example of structural unemployment is a(n): A) autoworker who is temporarily laid off from an automobile company because of a decline in sales. B) geologist who is permanently laid off from an oil company because of an increase in wages won by labor unions. C) worker at a fast-food restaurant who quits work and attends college. D) real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California. 21. Efficiency wages encourage: A) workers to look for a better job. B) potential workers to remain out of the labor force. C) workers to stay in their current job. D) workers to get more job training. 22. The natural rate of unemployment is: A) the rate of unemployment that exists during recessions. B) equal to the sum of frictional and cyclical unemployment. C) equal to the sum of frictional and structural unemployment. D) cyclical unemployment less frictional unemployment. 23. The natural level of unemployment contains no unemployment. A) minority B) structural C) frictional D) cyclical Page 5

6 24. Which of the following statements is FALSE? A) Both frictional and structural unemployment can occur even if unemployment is at its natural level. B) Cyclical unemployment is unemployment that is in excess of that associated with the natural level of employment. C) A new college graduate looking for his or her first professional job may experience frictional unemployment. D) Efficiency wages may cause frictional unemployment. Use the following to answer question 25: 25. (Table: The Consumer Price Index (CPI)) According to the accompanying table, the inflation rate between 2011 and 2012 is: A) 10%. B) 3%. C) 1.4%. D) 24.6%. 26. (Table: The Consumer Price Index (CPI)) According to the accompanying table, the consumer price index in 2009 was In 2010, it was What was the rate of inflation from 2009 to 2010? A) 12.2% B) 4.5% C) 2.1% D) 16.7% 27. When hyperinflation forces Emily to visit her bank very frequently to keep her cash holdings to a minimum, economists say that Emily is experiencing a: A) shoe-leather cost. B) menu cost. C) unit-of-account cost. D) Fisher effect. Page 6

7 28. The invention of ATMs reduced the: A) menu costs of inflation. B) shoe-leather costs of inflation. C) unit-of-account costs of inflation. D) seignorage. 29. When hyperinflation forces Pedro to change the price stickers on the books in his bookstore very frequently to keep up with the aggregate price level, economists say that Pedro is experiencing a: A) shoe-leather cost. B) menu cost. C) unit-of-account cost. D) debt deflation. 30. All of the following are costs of inflation except: A) menu costs. B) shoe-leather costs. C) unit-of-account costs. D) efficiency wage costs. Use the following to answer questions 31-32: Figure: The Labor Market Page 7

8 31. (Figure: The Labor Market) Refer to the accompanying figure on the labor market. The equilibrium wage rate is: A) $16. B) $15. C) $14. D) $ (Figure: The Labor Market) Refer to the accompanying figure on the labor market. The level of employment at the equilibrium wage rate is: A) 80,000. B) 110,000 C) 100,000. D) 90,000. Page 8

9 Answer Key 1. B 2. D 3. B 4. C 5. C 6. B 7. B 8. C 9. B 10. C 11. A 12. C 13. C 14. B 15. B 16. A 17. A 18. C 19. A 20. B 21. C 22. C 23. D 24. D 25. C 26. C 27. A 28. B 29. B 30. D 31. B 32. C Page 9