CHAPTER 28 MACRO

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
• d.All of the above would be counted as unemployed.

Who would be included in the labor force?

• Karen, who works most of the week in a steel factory
• Beth, who is waiting for her new job at the bank to start
• Dave, who does not have a job, but is looking for work
• All of the above are included in the labor force.

A college student who is not working or looking for a job is counted as

• neither employed nor part of the labor force.
• unemployed and in the labor force.
• unemployed, but not in the labor force.
• employed and in the labor force.

Anna has just finished school and started looking for a job, but has not yet found one. As a result, the unemployment rate

• increases, and the labor-force participation rate is unaffected.
• increases, and the labor-force participation rate increases.
• is unaffected, and the labor-force participation rate increases.
• increases, and the labor-force participation rate decreases.

Job search

• explains why firms pay less than the competitive equilibrium wage.
• b.is due simply to the failure of wages to balance labor supply and labor demand.
• is the process of matching workers with appropriate jobs.
• All of the above are correct.

People who are unemployed because of job search are best classified as

• discouraged workers.
• cyclically unemployed.
• frictionally unemployed.
• structurally unemployed.

Frictional unemployment can be the consequence of

• changes in the working conditions offered by competing firms.
• an industry declining while another is growing.
• workers leaving existing jobs to find ones they like better.
• All of the above are correct.

Unemployment insurance

• reduces search effort and raises unemployment
• reduces search efforts and lowers unemployment
• increases search effort and raises unemployment
• increases search effort and decreases unemployment

An efficient wage

• helps to reduce the level of unemployment.
• may decrease the cost of production.
• requires increased turnover.
• All of the above are correct.

There will be structural unemployment if

• some wages are kept above the equilibrium level.

• some people choose not to work at the equilibrium wage.
• some wages are below the equilibrium level.
• All of the above could be correct.