Question 1

The natural unemployment rate includes
A)both frictional and structural unemployment.
B)neither frictional nor structural unemployment.
C)structural but not frictional unemployment.
D)frictional but not structural unemployment.

Accepted Answer

The natural unemployment rate includes both frictional and structural unemployment, which are inevitable and exist even in a healthy and growing economy.

Question 2

Adam is looking for a job in marketing. He has had some offers and his prospects are promising, but he has not yet accepted a job. Amanda lost her job working for Mercury Bicycles because many customers decided they prefer bicycles manufactured by Ultimate Bicycles instead. Who is frictionally unemployed?
A)Adam but not Amanda
B)Amanda but not Adam
C)both Adam and Amanda
D)neither Amanda nor Adam

Accepted Answer

The answer of Adam is looking for a job in...

Question 3

Jenna is searching for a job that suits her tastes about where to live. Mary is looking for a job that makes best use of her skills.
A)Jenna and Mary are both frictionally unemployed.
B)Jenna and Mary are both structurally unemployed.
C)Jenna is frictionally unemployed, and Mary is structurally unemployed.
D)Jenna is structurally unemployed, and Mary is frictionally unemployed.

Accepted Answer

The answer of Jenna is searching for a job that...

Question 4

Meredith is looking for work as a computer programmer. Although her prospects are good, she has not yet taken a job. Julie is looking for work in a steel mill. Every time she shows up for an interview, there are more people looking for work than there are openings. Someone waiting in line with her tells her it has been that way for a long time.
A)Meredith and Julie are both frictionally unemployed.
B)Meredith and Julie are both structurally unemployed.
C)Meredith is frictionally unemployed, and Julie is structurally unemployed.
D)Meredith is structurally unemployed, and Julie is frictionally unemployed.

Accepted Answer

Meredith is frictionally unemployed because she is actively looking for work in her field but has not yet found a job. Julie is structurally unemployed because the steel mill industry has a surplus of workers and few job openings, making it difficult for her to find work in that field.

Question 5

People who are unemployed because of job search are best classified as
A)cyclically unemployed.
B)structurally unemployed.
C)frictionally unemployed.
D)discouraged workers.

Accepted Answer

People who are unemployed because of job search are best classified as frictionally unemployed because they are seeking new employment opportunities and are temporarily between jobs.

Question 6

Every month when the Bureau of Labor Statistics (BLS) announces the unemployment rate, it also announces the number of jobs the economy has gained or lost. Where does the BLS get the data about jobs?
A)from the survey of 60,000 households, which is called the Current Population Survey
B)from the Establishment Survey that measures both frictional and structural unemployment
C)from the survey of 160,000 business that have over 40 million workers on their payrolls
D)from the Congressional Budget Office, which also calculates the GDP of the United States

Accepted Answer

The BLS gets data about jobs from the Establishment Survey, which surveys around 160,000 businesses and government agencies, covering over 40 million workers.

Question 7

John is a stockbroker. He has had several job offers, but he has turned them down because he thinks he can find a firm that better matches his tastes and skills. Curtis has looked for work as an accountant for some time. While the demand for accountants does not appear to be falling, there seems to be more people applying than jobs available.
A)John and Curtis are both frictionally unemployed.
B)John and Curtis are both structurally unemployed.
C)John is frictionally unemployed, and Curtis is structurally unemployed.
D)John is structurally unemployed, and Curtis is frictionally unemployed.

Accepted Answer

John is voluntarily unemployed and actively searching for a better job that matches his skills and preferences, which is an example of frictional unemployment. Curtis, on the other hand, is struggling to find work due to a mismatch between his skills and the available job opportunities, which is an example of structural unemployment. Therefore, John is frictionally unemployed while Curtis is structurally unemployed.

Question 8

Which of the following is an explanation for the existence of frictional unemployment?
A)efficiency wages
B)minimum-wage laws
C)unions
D)job search

Accepted Answer

Frictional unemployment exists because of job search, as workers take time to find a job that best fits their skills and preferences.

Question 9

Cyclical unemployment is caused by
A)frictional and structural unemployment
B)frictional but not structural unemployment
C)structural but not frictional unemployment
D)neither frictional nor structural unemployment

Accepted Answer

The answer of Cyclical unemployment is caused by
A)frictional and structural...

Question 10

Every month, the Bureau of Labor Statistics surveys 160,000 business establishments to help determine the
A)number of people unemployed.
B)number of jobs the economy has gained or lost.
C)size of the labor force.
D)number of people who own their own businesses.

Accepted Answer

The Bureau of Labor Statistics surveys business establishments to gather data on employment levels, hours worked, and earnings. This information is used to calculate the number of jobs gained or lost in the economy.

Question 11

Which of the following is not an explanation for structural unemployment?
A)efficiency wages
B)job search
C)minimum-wage laws
D)unions

Accepted Answer

The answer of Which of the following is not an...

Question 12

Frictional unemployment is thought to explain relatively
A)short spells of unemployment, as is structural unemployment.
B)long spells of unemployment, as is structural unemployment.
C)short spells of unemployment, while structural unemployment is thought to explain relatively long spells of unemployment.
D)long spells of unemployment, while structural unemployment is thought to explain relatively short spells of unemployment.

Accepted Answer

Frictional unemployment is unemployment that occurs when workers are between jobs, looking for new employment. As such, it typically leads to short spells of unemployment. Structural unemployment, on the other hand, occurs when there is a mismatch between the skills that workers have and the skills that employers are looking for. This type of unemployment tends to last longer, as it can take time for workers to acquire the necessary skills to enter a new occupation. Therefore, frictional unemployment is thought to explain relatively short spells of unemployment, while structural unemployment is thought to explain relatively long spells of unemployment.

Question 13

Frictional unemployment results from
A)job searching. It is often thought to explain relatively short spells of unemployment.
B)job searching. It is often thought to explain relatively long spells of unemployment
C)a surplus in the some labor markets. It is often thought to explain relatively short spells of unemployment.
D)a surplus in some labor markets. It is often thought to explain relatively long spells of unemployment.

Accepted Answer

Frictional unemployment results from job searching, and it is often thought to explain relatively short spells of unemployment.

Question 14

Unemployment that results because the number of jobs available in some labor markets may be insufficient to give a job to everyone who wants one is called
A)the natural rate of unemployment.
B)cyclical unemployment.
C)structural unemployment.
D)frictional unemployment.

Accepted Answer

Structural unemployment is caused when there is a mismatch between the skills and qualifications of workers and the available jobs in the labor market. This type of unemployment can persist even during periods of economic growth and is typically more long-term than the other types of unemployment.

Question 15

Teenagers have more frequent unemployment spells so, on average, they spend more time searching for jobs. Other thing the same, this means that teenagers have a
A)higher unemployment rate. If a larger portion of the adult population were teenaged, the natural rate of unemployment would be higher.
B)higher unemployment rate. The portion of the adult population that is teenaged does not affect the natural rate of unemployment.
C)lower unemployment rate. If a larger portion of the adult population were teenaged, the natural rate of unemployment would be lower.
D)lower unemployment rate. The portion of the adult population that is teenaged does not affect the natural rate of unemployment.

Accepted Answer

Teenagers have a higher unemployment rate due to more frequent unemployment spells and longer job searches. If a larger portion of the adult population were teenaged, the natural rate of unemployment would be higher because there would be a higher proportion of individuals experiencing longer job searches and more frequent unemployment spells, which would increase the overall unemployment rate.

Question 16

People who are unemployed because wages are, for some reason, set above the level that brings labor supply and demand into equilibrium are best classified as
A)cyclically unemployed.
B)structurally unemployed.
C)frictionally unemployed.
D)discouraged workers.

Accepted Answer

This describes structural unemployment, which is caused by underlying shifts in the economy such as technological change or a decline in demand for certain industries/skills. These shifts create a mismatch between the skills and wages of workers and the needs and demands of employers.

Question 17

​Derrick loses his job, but does not look for work. Which of the following are consequences of this change in Derrick's status?
A)unemployment rises and the labor force is unchanged
B)unemployment rises and the labor force falls
C)unemployment and the labor force are unchanged
D)unemployment is unchanged and the labor force falls

Accepted Answer

Since Derrick is not looking for work, he is not counted as unemployed, so unemployment is unchanged. However, since he is no longer part of the labor force, the labor force falls.

Question 18

Which of the following is not an explanation for the existence of unemployment in the long run?
A)it takes time for workers to search for the jobs that are best suited for them
B)minimum-wage laws
C)unions
D)the business cycle

Accepted Answer

The business cycle is a short-term explanation for unemployment, as it refers to the cyclical fluctuations in economic activity. The other choices are all long-term explanations for unemployment. A) Workers may take time to find the best job for them, leading to frictional unemployment. B) Minimum-wage laws can create structural unemployment by making some jobs too expensive for employers. C) Unions can also create structural unemployment by negotiating higher wages and benefits that make some jobs unaffordable for employers.

Question 19

Sandy has graduated from college and is devoting her time to searching for a job. She has seen plenty of openings but has not yet been offered one that best suits her tastes and skills. Sandy is
A)structurally unemployed. Structural unemployment exists even in the long run.
B)structurally unemployed. There is no structural unemployment in the long run.
C)frictionally unemployed. Frictional unemployment exists even in the long run.
D)frictionally unemployed. There is no frictional unemployment in the long run.

Accepted Answer

Sandy's situation is an example of frictional unemployment because she is currently unemployed due to her job search process and looking for a job that fits her preferences and skills. This type of unemployment is a normal part of a healthy labor market and exists even in the long run. Option A and B are incorrect because structural unemployment arises due to a mismatch between the skills of workers and requirements of available job opportunities. Option D is incorrect because frictional unemployment is considered a long-term phenomenon.

Question 20

Bob is looking for work after school, but everywhere he fills out an application, the managers say they always have a lot more applications than open positions. Tom has a law degree. Several firms have made him offers, but he thinks he might be able to find a firm where his talents could be put to better use.
A)Bob and Tom are both frictionally unemployed.
B)Bob and Tom are both structurally unemployed.
C)Bob is frictionally unemployed, and Tom is structurally unemployed.
D)Bob is structurally unemployed, and Tom is frictionally unemployed.

Accepted Answer

The answer of Bob is looking for work after school,...

Quiz 28: Unemployment and Its Natural Rate

The natural unemployment rate includes

Jenna is searching for a job that suits her tastes about where to live. Mary is looking for a job that makes best use of her skills.

People who are unemployed because of job search are best classified as

Every month when the Bureau of Labor Statistics (BLS) announces the unemployment rate, it also announces the number of jobs the economy has gained or lost. Where does the BLS get the data about jobs?

Which of the following is an explanation for the existence of frictional unemployment?

Cyclical unemployment is caused by

Every month, the Bureau of Labor Statistics surveys 160,000 business establishments to help determine the

Which of the following is not an explanation for structural unemployment?

Frictional unemployment is thought to explain relatively

Frictional unemployment results from

Unemployment that results because the number of jobs available in some labor markets may be insufficient to give a job to everyone who wants one is called

Teenagers have more frequent unemployment spells so, on average, they spend more time searching for jobs. Other thing the same, this means that teenagers have a

People who are unemployed because wages are, for some reason, set above the level that brings labor supply and demand into equilibrium are best classified as

​Derrick loses his job, but does not look for work. Which of the following are consequences of this change in Derrick's status?

Which of the following is not an explanation for the existence of unemployment in the long run?

Sandy has graduated from college and is devoting her time to searching for a job. She has seen plenty of openings but has not yet been offered one that best suits her tastes and skills. Sandy is

Derrick loses his job, but does not look for work. Which of the following are consequences of this change in Derrick's status?