Review-Chapter 29

The amount of unemployment that an economy normally experiences is called the

• average rate of unemployment

• natural rate of unemployment

• cyclical rate of unemployment

• typical rate of unemployment

Unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills is called

• the natural rate of unemployment

• cyclical unemployment

• structural unemployment

• frictional unemployment

When a minimum-wage law forces the wage to remain above the level that balances supply and demand, it

• raises the quantity of labor supplied and raises the quantity of labor demanded compared to the equilibrium level

• raises the quantity of labor supplied and reduces the quantity of labor demanded compared to the equilibrium level

• reduces the quantity of labor supplied and raises the quantity of labor demanded compared to the equilibrium level

• reduces the quantity of labor supplied and reduces the quantity of labor demanded compared to the equilibrium level

Pekelo owns his own business.  The Bureau of Labor Statistics counts Pekelo as

• unemployed and in the labor force

• unemployed and not in the labor force

• employed and in the labor force

• employed and not in the labor force

If minimum-wage laws that prevent wages from reaching equilibrium were eliminated, then there would be no

• cyclical unemployment

• frictional unemployment

• structural unemployment

• natural unemployment

Which of the following is not an explanation for the existence of unemployment in the long run?

• it takes time for workers to search for the jobs that are best suited for them

• minimum-wage laws

• unions

• the business cycle

Which of the following is correct?

• Labor force = number of employed

• Labor force = population - number of unemployed

• Unemployment Rate = number of unemployed  (number of employed + number of unemployed)  100

• Unemployment Rate = number of unemployed  adult population  100

The official unemployment rate ignores

• People with professional jobs

• People who work on commission

• Discouraged workers who have given up looking for a job

• People with professional jobs, people who work on commission, and discouraged workers who have given up looking for a job

Sam, who is 55 years old and has been a steelworker for 30 years, is unemployed because the steel plant in his town closed and moved to Mexico. Sam is experiencing

• Cyclical unemployment

• Permanent unemployment

• Frictional unemployment

• Structural unemployment

Increase in unemployment compensation will result in

• Decrease unemployment

• Increase unemployment

• Has no effect on unemployment

• Decrease the labor force