Chapter15e

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.

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 decreases real GDP.
• Cyclical unemployment is inversely related to short-run economic fluctuations.
• All of the above are correct.

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

• Shasta, who is waiting for her new job to start
• Mary, who worked only 35 hours last week
• Karen, who neither has a job nor is looking for one
• None of the above would be counted as unemployeD.

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

• Brian, a full-time student who is not looking for work
• Kate, who is on temporary layoff
• Heath, who has retired and is not looking for work
• All of the above would be counted as unemployed.

Who would not be included in the labor force?

• Jay, who is on temporary layoff
• Mike, who has retired and is not looking for work
• Jane, who does not have a job, but has applied for several in the last week
• None of the above are included in the labor force.

Nancy is searching for a job that suits her tastes about where to live and the people she works with. Laura is looking for a job that makes best use of her skills.

• Nancy and Laura are both frictionally unemployeD.
• Nancy and Laura are both structurally unemployeD.
• Nancy is frictionally unemployed, and Laura is structurally unemployeD.
• Nancy is structurally unemployed, and Laura is frictionally unemployed.

Merideth is looking for work as a computer programmer. Although her prospects are good she hasn’t yet taken a joB. Julie is looking for work in a steel mill, but there aren’t many job ads for steel workers and every time she shows up for an interview, there are many more people than openings.

• Meredith and Julie are both frictionally unemployeD.
• Meredith and Julie are both structurally unemployeD.
• Meredith is frictionally unemployed, and Julie is structurally unemployeD.
• Meredith is structurally unemployed, and Julie is frictionally unemployed.

Curtis 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. John is an accountant. He has looked for work for some time, but no accounting firms are hiring.

• John and Curtis are both frictionally unemployeD.
• John and Curtis are both structurally unemployeD.
• Curtis is frictionally unemployed, and John is structurally unemployeD.
• Curtis is structurally unemployed, and John is frictionally unemployeD.

The natural unemployment rate includes

• both frictional and structural unemployment.
• neither frictional nor structural unemployment.
• structural, but not frictional unemployment.
• frictional, but not structural unemployment.

An increase in the minimum wage would

• increase both the quantity demanded and the quantity supplied of labor.
• decrease both the quantity demanded and the quantity supplied of labor.
• increase the quantity of labor demanded while decreasing the quantity supplied.
• decrease the quantity of labor demanded while increasing the quantity supplied.