Quiz 5

When the economy is at full employment

the natural rate of unemployment prevails the unemployment rate is greater than zero all remaining unemployment is either frictional or structural

Macro conditions affect the decisions firm and families make. After graduation, a college student might enter the job market during an economic expansion but apply for a graduate school during a recession because

the probability of finding a job is higher during economic expansion and lower during recession.

"Even though the economy is growing, even though it’s created more than two million jobs over the past 15 months, we still face some tough times." What statement is correct?

President Obama was referring to the slow job growth in the economy in 2011

The natural rate of unemployment is

the sum of structural unemployment and frictional unemployment

When the economy is at full employment, unemployment is equal to

the natural rate of unemployment

Economists do not define full employment as being as unemployment rate equal to zero since

only cyclical unemployment is zero

The labor force participation rate is calculated by

Labor force/ Working age population x100

Which one of the following accurately describes the relationship between frictional unemployment and job search?

People are said to be frictionally employed when they are between jobs and searching for new jobs.

In the journal article "Are Emily and Greg more employable than Lakisha and Jamal?" The author finds that

Job applications with white names tend to send 10 resumes to get one callback, whereas applications with african-american names need to send 15 resumes to get a callback

Which of the following is an example of structural unemployment?

Due to technological change, typewriter workers lose jobs and must refrain to find jobs in other industries

Suppose that Sally J recently lost her job as an underwater welder. In looking for a new job, she discovers that the only available jobs are for economists and that there are no openings for underwater welders because the trade is now obsolete. If Sally return to school to her an Economics degree, what is the best classification of her unemployment status?

Structurally unemployed

Suppose that the economy enters into a recession and that, as a result, Rusty loses his job at a delivery truck mechanic and remains unemployed. When the economy recovers, Rusty’s previous employer rehires him. What is the best classification for his time as an unemployed truck mechanic?

Cyclically unemployed

The three types of unemployment are

Frictional, Structural, and Cyclical unemployment

The employment population ratio measures the

percentage of the working age population that is employed

When an unemployed person drops out of the labor force, the unemployment rate

understates the true degree of joblessness in the economy

When an unemployed person drops out of the labor force, it

does not affect the employment-population ratio

A person who is in between jobs but actively engaged in a job search is considered to be

frictionally unemployed

Experts in hand-drawn animation who remain unemployed due to the film industry’s switch to computer-generated animation are considered to be

structurally unemployed

when a company reduces production and employment during a recessions, those employees who lose their jobs are generally considered to be

cyclically unemployed

Shouldn’t the unemployment rate fall when the number of people employed increases?

The unemployment rate remained the same because both the number of employed and unemployed increased propotionally

How does the BLS calculate the unemployment rate?

Number of employed/Number in labor face x 100

Bob Wesley believes that structural unemployment should be eliminated in order for an economy to be healthy… in making this argument, which of the following relevant issues is he ignoring?

Structural unemployment will exist in an economy that is innovative.

Recall the definitions of normal and inferior goods. During a recession, a person would prefer to work in an industry that produces

an inferior good because the demand for inferior goods should increase with decreases in income during a recession.

During an economic expansion, a person would prefer to work in an industry that produces

a normal good because the demand for normal goods should increase with increases in income during economic expansion.

Which groups tend to have above-average underemployment rates, and which groups tend to have below average unemployment rates?

Black teenagers as a group have lower unemployment rates than white teenagers.

How does the US economy create and destroy millions of jobs each year?

Some businesses are expanding, while others are contracting. In the market system, new firms are constantly entering and exiting various industries.

Which of the following is an example of cyclical unemployment?

In an academic downturn, a manufacturing plant reduces production and temporarily lays off workers.

Suppose John Q is currently unemployed. Each day, John Q spends the entire day searching available job openings for an appropriate position given his set of skills, abilities, and interests. If someone asks John Q what he does for work, he tells them that he is "currently in between jobs." Which of the following best classifies John Q’s unemployment status?

Frictionally unemployed

In 2009, the ratio of women’s earnings to men’s, was 77%. This is unequivocal evidence of gender discrimination, and women are discriminated a full 23 cents for every dollar.

False

While studies do find evidence of gender discrimination, especially against married women with children, the gender wage gap is also explained in part by women’s lower level of work experience, relative to men’s.

True