Question 1

Evidence from research studies by economists
A)shows that increased unemployment benefits decrease the job search efforts of the unemployed.
B)shows that increased unemployment benefits have virtually no effect on the job search efforts of the unemployed.
C)shows that increased unemployment benefits increase the job search efforts of the unemployed.
D)is conflicting on what increased unemployment benefits do to the job search efforts of the unemployed.

Accepted Answer

The answer of Evidence from research studies by economists
A)shows that...

Question 2

Government-run employment agencies and public training programs are operated by the government to try to facilitate job search and reduce unemployment.
A)Almost all economists agree that such programs are of no use.
B)Almost all economists agree that such programs work very well.
C)Some economists claim that the government can do these things no better than firms and individuals could do them for themselves.
D)Some economists claim that these programs increase frictional unemployment.

Accepted Answer

There is a debate among economists about the effectiveness of government-run employment agencies and public training programs. Some argue that the government may not be able to do these tasks better than firms and individuals on their own. This implies that choice C is the best answer. While some studies have shown positive outcomes from these programs, there is no consensus among economists about their overall effectiveness. Therefore, option A and B are incorrect. Similarly, some economists contend that these programs can increase frictional unemployment by making it easier for workers to search for jobs. This implies that option D is incorrect.

Question 3

Economists would predict that, other things the same, the more generous unemployment compensation a country has, the
A)shorter the duration of each spell of unemployment and the higher the unemployment rate.
B)shorter the duration of each spell of unemployment and the lower the unemployment rate.
C)longer the duration of each spell of unemployment and the higher the unemployment rate.
D)longer the duration of each spell of unemployment and the lower the unemployment rate.

Accepted Answer

Economists predict that more generous unemployment compensation would lead to longer spells of unemployment because individuals may be less motivated to search for work if they are receiving a higher level of financial assistance. This would lead to a higher unemployment rate overall.

Question 4

Which of the following is not correct?
A)Frictional unemployment is inevitable in a dynamic economy.
B)Although the unemployment created by sectoral shifts is unfortunate, in the long run such changes lead to higher productivity and higher living standards.
C)The internet can help facilitate the job search and reduce frictional unemployment.
D)Unemployment insurance decreases frictional unemployment.

Accepted Answer

Unemployment insurance provides a financial cushion for individuals who are unemployed, which can decrease their urgency to quickly find a new job. This can actually increase the duration of frictional unemployment rather than decrease it.

Question 5

Which of the following is a source of frictional unemployment?
A)changes in the composition of demand among industries or regions
B)minimum wages
C)labor unions
D)None of the above is correct.

Accepted Answer

Frictional unemployment refers to the temporary unemployment of people who are transitioning between jobs or careers. Changes in the composition of demand among industries or regions can lead to temporary job loss as workers search for new job opportunities. Minimum wages and labor unions are not sources of frictional unemployment as they are policies that can affect the overall level of employment and wages in the economy.

Question 6

Of the following groups, who is eligible for unemployment insurance benefits?
A)the unemployed who quit their jobs
B)the unemployed who were laid off because their previous employers no longer needed their skills
C)the unemployed who were fired for cause
D)the unemployed who just entered the labor force

Accepted Answer

Eligibility for unemployment insurance benefits usually requires that the individual is unemployed through no fault of their own, meaning they were laid off due to lack of work, reduction in workforce, or employer's financial difficulties. Therefore, option B, where the unemployed were laid off because their previous employers no longer needed their skills, is eligible for unemployment insurance benefits. A (quitting), C (fired for cause), and D (just entered the labor force) are not typically eligible for benefits.

Question 7

Unemployment insurance
A)reduces search effort which raises unemployment.
B)reduces search effort which lowers unemployment.
C)increases search effort which raises unemployment.
D)increases search effort which decreases unemployment.

Accepted Answer

Unemployment insurance provides a safety net for the unemployed, which reduces the urgency to find a job. This can lead to a decrease in job search effort and an increase in unemployment.

Question 8

A typical American worker covered by unemployment insurance receives
A)50 percent of his former wages for 26 weeks.
B)50 percent of his former wages for 52 weeks.
C)100 percent of his former wages for 26 weeks.
D)100 percent of his former wages for 52 weeks.

Accepted Answer

According to the Department of Labor, the typical American worker covered by unemployment insurance receives about 50 percent of their former wages for up to 26 weeks.

Question 9

Which of the following does not help reduce frictional unemployment?
A)government-run employment agencies
B)public training programs
C)unemployment insurance
D)All of the above help reduce frictional unemployment.

Accepted Answer

Unemployment insurance provides financial support to individuals who are out of work due to no fault of their own, such as layoffs or company closures. It does not directly address frictional unemployment, which is caused by individuals seeking better job opportunities or experiencing temporary layoffs while transitioning between jobs. Government-run employment agencies and public training programs can help match individuals with job opportunities and provide vocational training, respectively, which can reduce frictional unemployment.

Question 10

Public policy
A)can reduce both frictional unemployment and the natural rate of unemployment.
B)can reduce frictional unemployment, but it cannot reduce the natural rate of unemployment.
C)cannot reduce frictional unemployment, but it can reduce the natural rate of unemployment.
D)cannot reduce either frictional unemployment or the natural rate of unemployment.

Accepted Answer

Public policy can address both frictional unemployment, which is the short-term unemployment that arises from the process of matching workers with jobs, and the natural rate of unemployment, which includes frictional plus structural unemployment, through measures such as job training programs, education, and efficient unemployment benefits. These policies can make the labor market more efficient and help workers transition between jobs more quickly, thus potentially reducing both types of unemployment.

Question 11

Lucy quit her job because she was unhappy at work. Genevieve was fired because she frequently surfed the Internet rather than working on her assigned tasks. Who is eligible for unemployment insurance benefits?
A)both Lucy and Genevieve
B)Lucy but not Genevieve
C)Genevieve but not Lucy
D)neither Lucy nor Genevieve

Accepted Answer

The answer of Lucy quit her job because she was...

Question 12

Policies that reduce the time it takes unemployed workers to find new jobs
A)can reduce both frictional unemployment and the natural rate of unemployment.
B)can reduce frictional unemployment, but they cannot reduce the natural rate of unemployment.
C)cannot reduce frictional unemployment, but they can reduce the natural rate of unemployment.
D)cannot reduce either frictional unemployment or the natural rate of unemployment.

Accepted Answer

Policies that reduce the time it takes unemployed workers to find new jobs, such as job training programs or job matching services, can reduce both the frictional unemployment that results from the time it takes for workers to search for and find new jobs and the natural rate of unemployment, which includes both structural and frictional unemployment. By reducing the time it takes for workers to find new employment, these policies can help to lower the overall level of unemployment in the economy.

Question 13

Frictional unemployment can be the consequence of
A)workers leaving existing jobs to find ones they like better.
B)one industry declining while another is growing.
C)changes in the working conditions offered by competing firms.
D)All of the above are correct.

Accepted Answer

Frictional unemployment can occur due to a variety of reasons, such as workers voluntarily leaving their jobs to find better ones (A), shifts in industries where one industry may be declining while another is growing (B), or changes in working conditions offered by competing firms (C). Therefore, all of the options are correct.

Question 14

Which of the following helps to reduce frictional unemployment?
A)government-run employment agencies
B)public training programs
C)the Internet
D)All of the above are correct.

Accepted Answer

All three options can help reduce frictional unemployment. Government-run employment agencies can help connect job seekers with potential employers, public training programs can help individuals gain new skills and therefore make them more employable, and the internet can make job searches and applications more efficient. By reducing the time it takes for job seekers to find appropriate employment, these measures can help decrease frictional unemployment.

Question 15

Unemployment insurance
A)reduces the hardship of unemployment, but it also increases the amount of unemployment.
B)reduces the incentive for the unemployed to find and take new jobs.
C)causes workers to be less likely to seek guarantees of job security when they negotiate with employers over the terms of employment.
D)All of the above are correct.

Accepted Answer

The answer of Unemployment insurance
A)reduces the hardship of unemployment, but...

Question 16

Wanda quit her job because she was unhappy at work. Arnold was fired from his landscaping job because his company was downsizing. Who is eligible for unemployment insurance benefits?
A)both Wanda and Arnold
B)Wanda but not Arnold
C)Arnold but not Wanda
D)neither Wanda nor Arnold

Accepted Answer

Arnold is eligible for unemployment insurance benefits because he was laid off by his company due to downsizing. Wanda, on the other hand, voluntarily quit her job and therefore would not be eligible for unemployment benefits.

Question 17

Suppose that the Bureau of Labor Statistics predicts that the number of jobs for dental hygienists will grow faster than most occupations while the number of jobs for bookbinders will decline. This change in the labor market could lead to
A)frictional unemployment created by efficiency wages.
B)structural unemployment created by efficiency wages.
C)frictional unemployment created by sectoral shifts.
D)structural unemployment created by sectoral shifts.

Accepted Answer

The answer of Suppose that the Bureau of Labor Statistics...

Question 18

Frictional unemployment is inevitable because
A)sectoral shifts are always happening.
B)there is a federal minimum-wage law in the U.S.
C)some people do not want to be employed.
D)unions are very popular in the U.S.

Accepted Answer

Frictional unemployment refers to the temporary unemployment that occurs when workers are between jobs. This type of unemployment is inevitable because sectors are constantly changing and workers may need time to adjust and find new employment that matches their skills and preferences. Therefore, choice A is the best answer. The federal minimum wage law (choice B) and popularity of unions (choice D) may affect the level and distribution of employment, but are not direct causes of frictional unemployment. Choice C is incorrect because most people do want to be employed, but may temporarily experience frictional unemployment while looking for the right job.

Question 19

More generous unemployment insurance would
A)raise structural unemployment.
B)raise frictional unemployment.
C)lower structural unemployment.
D)lower frictional unemployment.

Accepted Answer

More generous unemployment insurance would increase the amount of time individuals spend searching for a job, leading to a higher duration of unemployment and thus a higher level of frictional unemployment. It would not necessarily affect structural unemployment, which is caused by a mismatch between available jobs and the skills of the unemployed.

Question 20

Providing training for unemployed individuals is primarily intended to reduce
A)frictional unemployment.
B)seasonal unemployment.
C)structural unemployment.
D)cyclical unemployment.

Accepted Answer

The answer of Providing training for unemployed individuals is primarily...

Quiz 28: Unemployment and Its Natural Rate

Evidence from research studies by economists

Government-run employment agencies and public training programs are operated by the government to try to facilitate job search and reduce unemployment.

Economists would predict that, other things the same, the more generous unemployment compensation a country has, the

Which of the following is not correct?

Which of the following is a source of frictional unemployment?

Of the following groups, who is eligible for unemployment insurance benefits?

Unemployment insurance

A typical American worker covered by unemployment insurance receives

Which of the following does not help reduce frictional unemployment?

Public policy

Lucy quit her job because she was unhappy at work. Genevieve was fired because she frequently surfed the Internet rather than working on her assigned tasks. Who is eligible for unemployment insurance benefits?

Policies that reduce the time it takes unemployed workers to find new jobs

Frictional unemployment can be the consequence of

Which of the following helps to reduce frictional unemployment?

Unemployment insurance

Wanda quit her job because she was unhappy at work. Arnold was fired from his landscaping job because his company was downsizing. Who is eligible for unemployment insurance benefits?

Suppose that the Bureau of Labor Statistics predicts that the number of jobs for dental hygienists will grow faster than most occupations while the number of jobs for bookbinders will decline. This change in the labor market could lead to

Frictional unemployment is inevitable because

More generous unemployment insurance would

Providing training for unemployed individuals is primarily intended to reduce