Unemployment

The natural rate of unemployment is the

• unemployment rate that would prevail with zero inflation.

• rate associated with the highest possible level of GDP.

• difference between the long-run and short-run unemployment rates.

• amount of unemployment that the economy normally experiences

Cyclical unemployment refers to

• the relation between the probability of unemployment and a worker's changing level of experience.

• how often a worker is likely to be employed during her lifetime.

• year-to-year fluctuations of unemployment around its natural rate.

• long-term trends in unemployment.

The natural rate of unemployment

• is a constant.

• is the desirable rate of unemployment.

• cannot be altered by economic policy.

• none of the above is correct.

Which of the following is correct?

• Some degree of unemployment is inevitable.

• Other things the same an increase in the number of people who are unemployed is associated with a decrease in real GDP.

• Cyclical unemployment is inversely related to short-run economic fluctuations in GDP.

• All of the above are correct.

The sum of which of the following would necessarily be equal to the adult population in the US statistics on labor?

• employed, unemployed

• discouraged workers, employed, unemployed

• employed, unemployed, not in the labor force

• discouraged workers, employed, not in the labor force

Jack is a full-time unpaid homemaker not currently searching for other work. Jill is a full-time student who is not looking for a job. Who does the BLS count in the labor force?

• only Jack

• only Jill

• both Jack and Jill

• neither Jack nor Jill

Who of the following would be counted as unemployed according to official statistics?

• Mary, who is waiting for her new job to start

• Karen, who worked only 35 hours last week

• Shasta, who neither has a job nor is looking for one

• one of the above would be counted as unemployed.

Who would not be included in the labor force?

• Sally, who is on temporary layoff

• Sue, who has retired and is not looking for work

• Kylie, who does not have a job, but has applied for several in the last week

• None of the above is included in the labor force.

Evidence from research studies by economists

• show that increased unemployment benefits decrease the job-search efforts of the unemployed

• show that increased unemployment benefits have virtually no effect on the job-search efforts of the unemployed.

• show that increased unemployment benefits increases the job-search effort of the unemployed.

• find no clear-cut evidence on what increased unemployment benefits do to job-search efforts.

Other things the same, an increase in wages above their equilibrium level

• increases frictional unemployment but leaves the natural rate of unemployment unchanged.

• increases frictional unemployment and increases the natural rate of unemployment.

• increases structural unemployment but leaves the natural rate of unemployment unchanged.

• increases structural unemployment and increases the natural rate of unemployment.