Chapter 28 Study Guide

Multiple Choice
1. The amount of unemployment that an economy normally experiences is called the 2. Which of the following is NOT a type of unemployment? 3. Who of the following are included in the Bureau of Labor Statistics’ “employed”category?
 * a. average rate of unemployment.
 * b. natural rate of unemployment.
 * c. cyclical rate of unemployment.
 * d. typical rate of unemployment.
 * e. full unemployment rate.
 * a. seasonal unemployment
 * b. structural unemployment
 * c. frictional unemployment
 * d. cyclical unemployment
 * e. traditional unemployment

4. Which of the following is not a requirement for the Bureau of Labor Statistics to place someone in the “unemployed” category? 5. Zeeman is a college student who is not working or looking for a job. The Bureau of Labor Statistics counts Zeeman as 6. Matilda just graduated from college. In order to devote all her efforts to college, she did not hold a job. She is going to cruise around the country on her motorcycle for a month before she starts looking for work. Other things constant, the unemployment rate 7. The type of unemployment that fluctuates with the “ups and downs” of the economy is called 8. Economists agree that the U.S. natural rate of unemployment is approximately 9. Some people who are employed or who are not making serious effort to find employment will report themselves as unemployed. Some people who want to find work will be counted as out of the labor force. 10. Unemployment that results because the job skills possessed by those in some labor markets may be insufficient to give a job to everyone who wants one is called 11. If the natural rate of unemployment is 5.2 percent and the actual rate of unemployment is 5.7 percent, then by definition there is
 * 1) retired workers
 * 2) part-time workers
 * 3) workers on vacation
 * a. 1 only
 * b. 2 only
 * c. 3 only
 * d. 1 and 2 only
 * e. 2 and 3 only
 * a. The person must not have been employed.
 * b. The person must not have been fired from his or her previous job.
 * c. The person must have tried to find employment during the previous four weeks.
 * d. The person must have been available for work.
 * e. The person is actively seeking employment.
 * a. unemployed and in the labor force.
 * b. unemployed, but not in the labor force.
 * c. in the labor force, but not unemployed.
 * d. neither in the labor force nor unemployed.
 * e. in the labor force and employed as a full-time student.
 * a. increases and the labor-force participation rate decreases.
 * b. and the labor-force participation rate both increase.
 * c. increases and the labor-force participation rate is unaffected.
 * d. and the labor-force participation rate are both unaffected.
 * e. is unaffected but the labor-force participation rate decreases.
 * a. the normal rate of unemployment.
 * b. deviant unemployment.
 * c. cyclical unemployment.
 * d. fluctuating unemployment.
 * e. structural unemployment.
 * a. 0.0 percent.
 * b. 2.0 percent.
 * c. 5.0 percent.
 * d. 7.0 percent.
 * e. 9.0 percent.
 * a. Both the first and the second fact tend to make the reported unemployment rate lower than the actual unemployment rate.
 * b. Both the first and the second fact tend to make the reported unemployment rate higher than the actual unemployment rate.
 * c. The first fact tends to make the reported unemployment rate higher than the actual unemployment rate, whereas the second fact tends to make the reported unemployment rate lower than the actual unemployment rate.
 * d. The first fact tends to make the reported unemployment rate lower than the actual unemployment rate, whereas the second fact tends to make the reported unemployment rate higher than the actual unemployment rate.
 * e. Neither fact has any effect on the relationship between the reported unemployment rate and the actual unemployment rate.
 * a. the natural rate of unemployment.
 * b. cyclical unemployment.
 * c. structural unemployment.
 * d. frictional unemployment.
 * e. seasonal unemployment.
 * a. cyclical unemployment amounting to 0.5 percent of the labor force.
 * b. frictional unemployment amounting to 0.5 percent of the labor force.
 * c. structural unemployment amounting to 0.5 percent of the labor force.
 * d. structural unemployment amounting to 5.7 percent of the labor force.
 * e. frictional unemployment amounting to 5.7 percent of the labor force.

12. Refer to Figure 28-1. If the government imposes a minimum wage of $4, then employment will decrease by
 * a. 0 workers.
 * b. 2,000 workers.
 * c. 3,000 workers.
 * d. 4,000 workers.
 * e. 5,000 workers.

Answers

 * B
 * E
 * E
 * B
 * D
 * D
 * C
 * C
 * C
 * C
 * A
 * A

Free Response
1. Following the recession of 2001, there was a month in which employment and the unemployment rate both rose. Assuming the computations were correct how is it possible for both to have increased?

2. The table below uses data for the year 2003 provided by the Bureau of Labor Statistics and adjusted to be comparable to U.S. data. All values are in thousands. Fill in the blank entries in the table.