ECON 2105 Midterm: Econ 2105 Test 2 Notes

Severe unemployment is socially catastrophic. Mark all items below that can occur due to unemployment.

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Question 51 pts

What years was the unemployment rate equal to or great than 10%?

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Question 61 pts

The unemployment rate is understated due to:

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Question 71 pts

True or False. The Labor force participation rate is the percentage of adults in an economy who are either employed or who are unemployed and looking for a job.

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Question 81 pts

True or False. The Bureau of Labor Statistics reports the percentage of labor force unemployed utilizing the current population survey.

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Question 91 pts

Mark all that apply. Over time the unemployment rate.....

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Question 101 pts

According to the graphs presented by the author in this chapter, which group had the highest unemployment rate in 2010?

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Question 111 pts

According to the information presented by the author in this chapter, which group had the highest unemployment rate in 2015?

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Question 121 pts

According to the information presented by the author in this chapter, which group had the highest unemployment rate in 2015?

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Question 131 pts

True or False. An international comparison of unemployment rates across countries can be easily accomplished.

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Question 141 pts

Mark all that apply. Wages are sticky downward due to:

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Question 151 pts

Match the word to the correct definition.

Cyclical

[ Choose ] unemployment that occurs as workers move between jobs unemployment that occurs because individuals lack skills valued by employers or the Geographic distribution of jobs changes unemployment closely tied to the business cycle, like higher unemployment during a recession

Frictional

[ Choose ] unemployment that occurs as workers move between jobs unemployment that occurs because individuals lack skills valued by employers or the Geographic distribution of jobs changes unemployment closely tied to the business cycle, like higher unemployment during a recession

Structural

[ Choose ] unemployment that occurs as workers move between jobs unemployment that occurs because individuals lack skills valued by employers or the Geographic distribution of jobs changes unemployment closely tied to the business cycle, like higher unemployment during a recession

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Question 161 pts

A financial analyst who quits his/her job in Chicago and is pursuing similar work in Arizona. What type of unemployment occurred?

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Question 171 pts

True or False. With productivity low, average levels of unemployment will tend to be somewhat higher on average.

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Question 181 pts

True or False. Unemployment benefits in the United States are only federally controlled.

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Question 191 pts

True or False. The natural rate of unemployment will never be zero due to cyclical and frictional unemployment.

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Question 201 pts

True or False. Public policies to assist the unemployed as it relates to the supply side of the labor market affect how eager people are to find work

1.Since the minimum wage rate began it has typically stayed at about what percentage of the average manufacturing wage?

Select one: a. 75-80 % b. 40-50 % c. 20-30 % d. 10-20 %

2.Suppose there are 100 million in the labor force, and 6 million unemployed people.

During the next month, 200,000 people lose their jobs and 300,000 find jobs. The new total of employed is ________ and the new unemployment rate is ________.

Select one:

a. 100.1 million; 5.8 percent.

b. 93.9 million; 6.1 percent.

c. 94.1 million; 5.9 percent.

d. 100 million; 6.1 percent.

3.In a small country, the adult population equals 10,000. There are 3,000 people unemployed and 4,000 people are employed. The labor force participation rate equals

Select one:

a. 70 percent.

b. 40 percent.

c. 57 percent.

d. an undetermined amount given the lack of information.

4.The population of individuals at least 16 years of age can be broken into 3 groups. They are

Select one:

a. those working in the for-profit sector, those working in the nonprofit sector, and unemployed individuals.

b. the unemployed, discouraged workers, and retirees.

c. those employed full-time, those employed only part-time, and the unemployed.

d. None of these.

5.During the Great Depression,

Select one:

An a. most people who couldn't find work left the labor force, so the official unemployment rate remained low.

b. the U.S. unemployment rate reached its historical highest.

c. unemployment statistics were not collected.

d. the unemployment rate was not unusually high, but wage levels were low.

6.The term "market basket" means a

Select one:

a. collection of goods that changes every year and is defined by Congress.

b. collection of goods that can fit into an average shopping cart.

c. collection of goods that is used by a typical family.

d. collection of goods that are purchased during the holiday season.

7.A price index is the

Select one:

a. cost of a market basket of goods today.

b. cost of a market basket of goods and services a year ago is expressed as a percentage of the cost of the same market basket today.

c. year that is chosen as the point of reference for comparison of prices in other years.

d. cost of a market basket of goods and services today expressed as a percentage of the cost of the same market basket during a base year.

8.Which of the following does NOT cause a rightward shift in the supply curve?

Select one:

a. a reduction in resource costs

b. an increase in technology

c. a reduction in the expected future price of the good

d. a reduction in the price of the good

9.Which of the following is a possible outcome of setting a legal maximum rental rate below the market-clearing rental rate?

Select one:

a. a decrease in the quantity of rental housing demanded

b. an increase in the quantity of rental housing supply

c. a black market in rental housing

d. a surplus of rental housing

10.Rent controls primarily benefit

Select one:

a. people looking for rental units.

b. builders.

c. property owners.

d. people who already occupy rental units.

11.Of the following groups, which benefits most from a government price support program that establishes a floor price for an agricultural product that is higher than the product's market-clearing price?

Select one:

a. Consumers, who purchase more units of the product than they did before the price support program was implemented

b. Taxpayers, who no longer must provide funds to purchase surplus units of the product once the price support program is in place

c. The government, which receives subsidy payments from producers that are required to sell more of the product at a higher price under the government's program

d. Producers, who earn a higher price on the sale of each unit and also sell more units, thereby unambiguously earning higher revenues