Chapter 28 (B)

83. People who are unemployed because of job search are best classifified as

• A.cyclically unemployed.
• B.structurally unemployed.
• C. frictionally unemployed.
• D.discouraged workers.

84. Sectoral shifts in the economy

• A.create structural unemployment.
• B.immediately reduce unemployment.
• C. increase unemployment due to job search.
• D.on net leave unemployment unchanged.

85. From time to time the demand for workers has risen in one region of the United States and fallen in another. This illustrates

• A.frictional unemployment created by efficiency wages.
• B.structural unemployment created by efficiency wages.
• C. frictional unemployment created by sectoral shifts.
• D.structural unemployment created by sectoral shifts.

86. In 2002, the demand for construction workers increased and the demands for textile and steel workers diminished. This illustrates

• A.frictional unemployment created by a sectoral shift.
• B.structural unemployment created by a sectoral shift.
• C. frictional unemployment created by efficiency wages.
• D.structural unemployment created by efficiency wages.

87. Frictional unemployment can be the consequence of

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

88. Which of the following is a cause of frictional unemployment?

• A.the minimum wage
• B.a worker leaving a job to find one with better benefits
• C. labor unions
• D.All of the above are correct.

89. Which of the following is incorrect?

• A.Frictional unemployment is inevitable in a dynamic economy.
• B.Although the unemployment created by sectoral shifts is unfortunate, in the long run such changes lead to higher productivity and higher living standards.
• C. At least 10 percent of U.S. manufacturing jobs are destroyed every year.
• D.In a typical month more than 5 percent of workers leave their jobs.

90. The government operates programs for job training and job information intended to reduce unemployment.

• A.Almost all economists agree that such programs are of no use.
• B.Almost all economists agree that such programs work very well.
• C. Some economists claim that the government can do these things no better than firms and individuals could do them for themselves.
• D.None of the above are correct.

91. We would predict that the more generous unemployment compensation a country has,

• A.the shorter the duration of each spell of unemployment, and the higher the unemployment rate.
• B.the shorter the duration of each spell of unemployment, and the lower the unemployment rate.
• C. the longer the duration of each spell of unemployment, and the higher the unemployment rate.
• D.the longer the duration of each spell of unemployment, and the lower the unemployment rate.

92. Compared to the United States, Germany has higher unemployment rates. The cause of much of this difference seems to be attributable to

• A.a very high minimum wage.
• B.a government that spends very little.
• C. high unemployment insurance.
• D.the refusal of German firms to set wages according to efficiency wage theory.