Chapter 19

Suppose the government launches a successful advertising campaign that convinces workers with high school degrees to quit their jobs and become full time college students. This would cause

• the unemployment rate to decrease.

• no change in the unemployment rate.

• the labor force participation rate to decrease.

• the number of discouraged workers to increase.

An increase in unemployment insurance payments​ would, in​ effect, ________ the amount of time spent searching for a​ job, which would increase​ ________ unemployment.

• decrease; frictional

• increase; cyclical

• decrease; cyclical

• increase; frictional

The advice to​ "keep searching, there are plenty of jobs around here for which you are​ qualified", would be most appropriate for which of the following types of​ unemployment?

• frictional unemployment

• cyclical unemployment

• structural unemployment

• seasonal unemployment

The labor force equals the number of people

• in the working−age population.

• employed

• unemployed

• employed plus unemployed.

Which of the following would be the best measure of the cost of​ living?

• GDP deflator

• real GDP per person

• consumer price index

• real GDP

The advice to​ "retrain" would be most appropriate for which of the following types of​ unemployment?

• cyclical unemployment

• core unemployment

• structural unemployment

• frictional unemployment

Why might firms pay wages that are above the equilibrium wage in a​ market?

• to reduce profit

• to encourage workers to form labor unions

• to reduce the unemployment rate

• to increase the productivity of their workers

When the price of gasoline​ rises, some consumers begin riding their bikes more frequently or riding the bus instead of driving their cars. The fact that the CPI does not fully account for such changes in consumer behavior is called

• substitution bias.

• increase in quality bias.

• outlet bias.

• discrimination bias.

The equilibrium wage in a local labor market is​ $10 per hour. If a minimum wage of​ $15 per hour is​ imposed, which of the following will​ occur?

• a decrease in the quantity of labor supplied by households.

• There will be an increase in the quantity of labor demanded by firms.

• There will be an increase in unemployment

• All of the above will occur.

According to the​ text, economists consider full employment to occur when

• the unemployment rate consists of only frictional and structural unemployment

• frictional unemployment equals zero.

• the sum of frictional unemployment and structural unemployment equals zero.

• everyone who wants a job has a job.