Unemployment
Multiple Choice – Section 00: Introduction
1. To maintain their standard of living, most people rely on
a. government assistance.
b. their personal savings.
c. their labor earnings.
d. rental income.
2. To maintain their standard of living, most people rely on
a. government assistance.
b. their labor earnings.
c. their personal savings.
d. All of the above are correct.
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3. Which of the following is correct?
a. The amount of unemployment that a country typically experiences is a determinant of that
country‘s standard of living, and some degree of unemployment is inevitable in a complex
economy.
b. The amount of unemployment that a country typically experiences is a determinant of that
country‘s standard of living, and a complex economy can achieve zero unemployment.
c. The amount of unemployment that a country typically experiences is not a determinant of that
country‘s standard of living, and a complex economy can achieve zero unemployment.
d. The amount of unemployment that a country typically experiences is not a determinant of that
country‘s standard of living, and some degree of unemployment is inevitable in a complex
economy.
4. The amount of unemployment varies
a. little over time and across countries.
b. little over time but substantially across countries.
c. substantially over time but little across countries.
d. substantially over time and across countries.
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5. The amount of unemployment that an economy normally experiences is called the
a. average rate of unemployment.
b. natural rate of unemployment.
c. cyclical rate of unemployment.
d. typical rate of unemployment.
6. An economy’s natural rate of unemployment is the
a. economy’s long-run target level of unemployment.
b. amount of unemployment that the economy normally experiences.
c. lowest rate of unemployment the economy can achieve.
d. All of the above are correct.
7. The natural rate of unemployment is the
a. unemployment rate that would prevail with zero inflation.
b. rate associated with the highest possible level of GDP.
c. difference between the long-run and short–run unemployment rates.
d. amount of unemployment that the economy normally experiences.
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8. In the long run the unemployment rate equals
a. zero.
b. the cyclical rate of unemployment.
c. the natural rate of unemployment.
d. the sum of the cyclical and natural rate of unemployment.
9. Cyclical unemployment refers to
a. the portion of unemployment created by job search.
b. short-run fluctuations around the natural rate of unemployment.
c. changes in unemployment due to changes in the natural rate of unemployment.
d. the portion of unemployment created by wages set above the equilibrium level.
10. The deviation of unemployment from its natural rate is called
a. the economic rate of unemployment.
b. cyclical unemployment.
c. frictional unemployment.
d. structural unemployment.
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11. Cyclical unemployment refers to
a. the relationship between the probability of unemployment and a worker’s changing level of
experience.
b. how often a worker is likely to be employed during her lifetime.
c. year-to-year fluctuations of unemployment around its natural rate.
d. long–term trends in unemployment.
12. Cyclical unemployment
a. has a different explanation than does the natural rate of unemployment.
b. refers to the year-to-year fluctuation in unemployment around an economy’s natural rate of
unemployment.
c. is closely associated with short-run ups and downs of economic activity.
d. All of the above are correct.
13. Cyclical unemployment is closely associated with
a. long–term economic growth.
b. short-run ups and downs of the economy.
c. fluctuations in the natural rate of unemployment.
d. changes in the minimum wage.
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14. The designation “natural” implies that the natural rate of unemployment
a. is desirable.
b. is constant over time.
c. is impervious to economic policy.
d. does not go away on its own even in the long run.
15. The natural rate of unemployment
(i) is the economy’s desirable level of unemployment.
(ii) cannot be affected by economic policy.
(iii) is typically constant over time.
a. (i) and (ii) only
b. (iii) only
c. (i), (ii), and (iii)
d. None of the above is correct.
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16. The natural rate of unemployment
(i) is the economy’s desirable level of unemployment.
(ii) arises from a single problem that has a single solution.
(iii) is the amount of unemployment that does not go away on its own.
a. (i) and (ii) only
b. (iii) only
c. (i), (ii), and (iii)
d. None of the above is correct.
17. The natural rate of unemployment
a. arises from a single problem that has a single solution.
b. is easy for policymakers to reduce.
c. Both a and b are correct.
d. None of the above is correct.
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Multiple Choice – Section 01: Identifying Unemployment
1. The Bureau of Labor Statistics is part of the U.S. Department of
a. the Treasury.
b. Commerce.
c. Labor.
d. the Interior.
2. Measuring unemployment is the job of the
a. Congressional Budget Office.
b. Department of Commerce.
c. Council of Economic Advisers.
d. Bureau of Labor Statistics.
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3. The Bureau of Labor Statistics produces data on
a. unemployment.
b. types of employment.
c. length of the average workweek.
d. All of the above are correct.
4. Unemployment data are collected
a. from unemployment insurance claims.
b. through a regular survey of about 60,000 households.
c. through a regular survey of about 200,000 firms.
d. All of the above are correct.
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5. The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor
market from a regular survey of households called the
a. Census.
b. Labor Survey.
c. Survey of Economic Indicators.
d. Current Population Survey.
6. The Bureau of Labor Statistics produces data on unemployment
a. weekly.
b. monthly.
c. quarterly.
d. yearly.
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7. The Bureau of Labor Statistics produces data on unemployment and other aspects of the labor
market from a regular survey of about
a. 600 households.
b. 6,000 households.
c. 60,000 households.
d. 6,000,000 households.
8. Unemployment numbers reported by the Bureau of Labor Statistics are reported based on a
a. monthly survey of about 60,000 households.
b. monthly survey of about 6,000 households.
c. weekly survey of about 60,000 households.
d. weekly survey of about 6,000 households.
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9. Unemployment data is collected
a. through a monthly survey of about 20,000 firms.
b. through a monthly survey of about 60,000 households.
c. from unemployment insurance claims.
d. All of the above are correct.
10. Which of the following is not one of the categories into which the Bureau of Labor Statistics
places each adult of each surveyed household?
a. employed
b. unemployed
c. underemployed
d. not in the labor force
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11. The Bureau of Labor Statistics counts a member of a surveyed household as an adult if that
person is at least
a. 14 years old.
b. 16 years old.
c. 18 years old.
d. 21 years old.
12. Who of the following is not included in the Bureau of Labor Statistics’ “employed” category?
a. those who worked in their own business
b. those who worked as unpaid workers in a family member’s business
c. those waiting to be recalled to a job from which they had been laid off
d. those who were temporarily absent from work because of vacation.
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13. The Bureau of Labor Statistics places people in the “employed” category if they
a. are without a job, but are available for work and have tried to find a job during the previous
four weeks.
b. work without pay in a family member’s business.
c. are waiting to be recalled to a job from which they had been laid off.
d. All of the above are correct.
14. The Bureau of Labor Statistics places people in the “employed” category if they
a. are temporarily absent from their jobs.
b. are self-employed.
c. work without pay in a family member’s business.
d. All of the above are correct.
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15. To be counted as “employed” in the U.S. labor force statistics, a person
a. must be working for pay and be working full time.
b. must be working for pay but does not have to be working full time.
c. does not have to be working for pay if they are working for a family business but must be
employed full time.
d. does not have to be working for pay if they are working for a family business and does not
have to be working full time
16. Who in the adult population is counted as “employed” in U.S. labor statistics?
a. people who are temporarily absent from their job and people who work without pay in a family
member’s business
b. people who are temporarily absent from their job but not people who work without pay in a
family member’s business
c. people who work without pay in a family member’s business but not people who are
temporarily absent from their job
d. neither people who are temporarily absent from their job nor people who work without pay in a
family member’s business
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17. Who of the following are included in the Bureau of Labor Statistics’ “employed” category?
a. certain unpaid workers
b. part–time workers
c. workers on vacation
d. All of the above are correct.
18. Esmerelda worked part-time for her mother’s business without pay. Tabitha was absent from
work because she had strep throat. Who is counted as “employed” by the Bureau of Labor
Statistics?
a. Esmerelda but not Tabitha
b. Tabitha but not Esmerelda
c. both Esmerelda and Tabitha
d. neither Esmerelda nor Tabitha
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19. Amy is working part-time. Tavaris is on temporary layoff. Who is included in the Bureau of
Labor Statistics’ “employed” category?
a. only Amy
b. only Tavaris
c. both Amy and Tavaris
d. neither Amy nor Tavaris
20. Olga owns her own business. Sven is an unpaid worker in his family’s business. Who is included
in the Bureau of Labor Statistics’ “employed” category?
a. only Olga
b. only Sven
c. both Olga and Sven
d. neither Olga nor Sven
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21. Which of the following is correct?
a. The Bureau of Labor Statistics uses data collected from those applying for unemployment
insurance to compute the unemployment rate.
b. The labor force includes all adults who are able to work.
c. Unpaid homemakers are counted as “employed” by the Bureau of Labor Statistics.
d. People working part time are counted as “employed” by the Bureau of Labor Statistics.
22. For the Bureau of Labor Statistics to place someone in the “unemployed” category, that person
must
a. be available for work.
b. have tried to find employment during the previous week.
c. have previously been employed.
d. All of the above are correct.
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23. For the Bureau of Labor Statistics to place someone in the “unemployed” category, that person
must
a. have worked no more than 10 hours during the past week..
b. have tried to find employment during the previous year.
c. not have been laid off.
d. None of the above is correct.
24. Which of the following is a requirement for the Bureau of Labor Statistics to place someone in the
“unemployed” category?
a. The person must have worked no more than 10 hours during the past week.
b. The person must have tried to find employment during the previous four weeks.
c. The person may not have been laid off.
d. All of the above are correct.
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25. Which of the following includes everyone in the adult population that the Bureau of Labor
Statistics counts as “unemployed”?
a. anyone who is not employed
b. anyone who is not employed, is available for work, and has looked for work in the past four
weeks
c. anyone who is not employed, is available for work, has looked for work in the past four weeks,
and anyone who is waiting to be recalled from a job from which they have been laid off
d. anyone who is not employed, is available for work, has looked for work in the past four weeks,
anyone who is waiting to be recalled from a job from which they have been laid off, and
anyone who is employed part time and has searched for full time employment in the past 4
weeks
26. Who of the following is counted as “unemployed” by the Bureau of Labor Statistics?
a. someone working without pay for a family member’s business
b. someone who is absent from their job due to illness
c. someone on temporary layoff
d. All of the above are correct.