1. Job search
a.
is one reason economies always experience some unemployment.
b.
is the process of matching workers with appropriate jobs.
c.
would not be a problem if all workers and all jobs were the same.
d.
All of the above are correct.
2. If all workers and all jobs were the same such that all workers were equally well suited for all jobs, then there would be
no
a.
b.
c.
d.
3. Sectoral shifts in demand for output
a.
create structural unemployment.
b.
immediately reduce unemployment.
c.
increase unemployment due to job search.
d.
do not affect demand for labor.
4. From time to time, the demand for workers has risen in one region of the United States and fallen in another. This
illustrates
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.
5. Suppose that consumers decide to walk to work more frequently and drive cars less. Companies that make walking
shoes hire workers, while automobile companies lay off workers. This is an example of
a.
frictional unemployment created by sectoral shifts.
b.
frictional unemployment created by efficiency wages.
c.
structural unemployment created by efficiency wages.
d.
structural unemployment created by sectoral shifts.
6. Suppose that because of the popularity of the low-carb diet, bakeries need fewer workers and steak houses need more
workers. The unemployment created by this change is
a.
frictional unemployment created by efficiency wages.
b.
frictional unemployment created by sectoral shifts.
c.
structural unemployment created by efficiency wages.
d.
structural unemployment created by sectoral shifts.
7. Suppose the demand for hard-wood flooring increases, while the demand for wall-to-wall carpeting decreases. Based on
this change in consumer tastes, the demand for hard-wood-flooring factory workers in North Carolina increases, while the
demand for carpet factory workers in Georgia decreases. This is an example of
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.
8. Suppose that an anti-smoking campaign in Moscow, Russia, is successful so that Muscovites smoke less and chew gum
more. Tobacco companies lay off workers, while chewing gum manufacturers employ more workers. This is an example
of
a.
structural unemployment created by efficiency wages.
b.
structural unemployment created by sectoral shifts.
c.
frictional unemployment created by efficiency wages.
d.
frictional unemployment created by sectoral shifts.
9. The invention of the telegraph led to the loss of jobs for those who had delivered mail by horse but created jobs for
telegraph operators and delivery persons. This is an example of
a.
structural unemployment created by efficiency wages.
b.
structural unemployment created by sectoral shifts.
c.
frictional unemployment created by efficiency wages.
d.
frictional unemployment created by sectoral shifts.
10. 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.
11. 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.
12. 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.
13. 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.
14. 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.
15. 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.
16. 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.
17. 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.
18. 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.
19. Providing training for unemployed individuals is primarily intended to reduce
a.
frictional unemployment.
b.
seasonal unemployment.
c.
structural unemployment.
d.
cyclical unemployment.
20. 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.
21. 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
22. 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
23. 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
24. 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.
25. 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.
26. 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.
27. More generous unemployment insurance would
a.
raise structural unemployment.
b.
raise frictional unemployment.
c.
lower structural unemployment.
d.
lower frictional unemployment.
28. 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.
29. 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.
30. Unemployment insurance
a.
may improve the ability of the economy to match workers with appropriate jobs.
b.
reduces the job search efforts of the unemployed.
c.
increases the amount of frictional unemployment in the economy.
d.
All of the above are correct.
31. In the 1990’s Ireland made unemployment benefits less generous. This change would likely have reduced
a.
both structural unemployment and the natural rate of unemployment.
b.
structural unemployment but not the natural rate of unemployment.
c.
both frictional unemployment and the natural rate of unemployment.
d.
frictional unemployment but not the natural rate of unemployment.
32. Which of the following is correct?
a.
Unemployment insurance raises structural unemployment because it reduces the job search efforts of the
unemployed.
b.
Most economists are skeptical of the value of unemployment insurance primarily because they believe that it
results in a poorer match between workers and jobs.
c.
Studies show that when the unemployed become ineligible for benefits, the probability of their finding a job
rises markedly.
d.
All of the above are correct.
33. Frictional unemployment is
a.
not inevitable; rather, it can be reduced to zero by well-designed public policies.
b.
not inevitable; rather, it could be reduced to zero if by the elimination of unemployment insurance.
c.
inevitable, because at any given time, jobs are being created in some firms and destroyed in other firms.
d.
inevitable, because in some industries, wages are always set above the level that brings supply and demand
into equilibrium.
34. An economist claims that changes in information technology and unemployment insurance have reduced
unemployment. Which of these changes affect frictional unemployment?
a.
both the changes in information technology and unemployment insurance
b.
only the changes in information technology
c.
only the changes in unemployment insurance
d.
neither the changes in information technology nor the changes in unemployment insurance
35. Which of the following is not a cause of frictional unemployment?
a.
the destruction of manufacturing jobs
b.
a worker leaving a job to find one with better benefits
c.
minimum-wage laws
d.
unemployment insurance
36. Which of the following is not correct?
a.
The unemployment rate is an imperfect measure of a nation’s overall level of economic well-being.
b.
Most job search in the U.S. economy takes place without intervention by the government.
c.
Most economists agree that eliminating unemployment insurance would increase the nation’s overall level of
well-being.
d.
Other things the same, countries that offer more generous and longer-lasting unemployment insurance benefits
are likely to have higher unemployment rates.
37. Unemployment insurance tends to
a.
decrease structural unemployment.
b.
decrease cyclical unemployment.
c.
increase frictional unemployment.
d.
increase the number of discouraged workers.
38. 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.
Workers tend to move to jobs where they are most valued.
d.
Churning of the labor force signals that the economy is functioning poorly.
39. Frictional unemployment
a.
can be created both by workers quitting to find more suitable jobs and changes in a country’s comparative
advantages.
b.
can be created by workers quitting to find more suitable jobs but not by changes in a country’s comparative
advantages.
c.
can be created by changes in a country‘s comparative advantages, but not by workers quitting to find new jobs.
d.
is not created by workers quitting to find more suitable jobs nor by changes in a county’s comparative
advantages.
40. Suppose that a country becomes relatively better than other countries at producing wind generators, in this country
a.
structural unemployment and so the natural rate of unemployment will increase.
b.
structural unemployment and so cyclical unemployment will increase.
c.
frictional unemployment and so the natural rate of unemployment will increase.
d.
frictional unemployment and the cyclical rate of unemployment will increase.
41. If a country signs a trade agreement so that employment in some industries rises and employment in some industries
fall, then
a.
structual unemployment rises temporarily.
b.
structural unemployment rises permananently.
c.
frictional unemployment rises temporarily.
d.
frictional unemployment rises permanently.
42. Between 2002 and 2014, employment
a.
declined in construction and manufacturing.
b.
declined in construction and increased in manufacturing.
c.
delclined in manufacturing and increased in construction.
d.
increased in construction and manufacturing.
43. From 2002 to 2014, employment
a.
declined in health care and food services.
b.
declined in health care and increased in food services.
c.
declined in food services and increased in health care.
d.
increased in health care and food services.