Exam 3

Emeralda took a month-long vacation from working at her family law firm. Ruth is self-employed. Who is counted as "employed" by the Bureau of Labor Statistics?

• 1. Both Esmeralda and Ruth

• 1. Ruth but not Esmeralda

• 1. Neither Emeralda nor Ruth

• 1. Emeralda but not Ruth

Which of the following is not one of the categories into which the Bureau of Labor Statistics places each adult of each surveyed household?

• 1. not in the labor force

• 1. unemployed

• underemployed

• employed

The labor-force participation rate tells us the fraction of the population that

• 1. has chosen to participate in the labor market.

• 1. has ever been employed.

• is able to participate in the labor market.

• 1. has chosen not to participate in the labor market.

Matilda just graduated from college. In order to devote all her efforts to college, she didn't hold a job. She is going to tour around the country on her motorcycle for a month before she starts looking for work. Other things the same, the unemployment rate

• and the labor-force participation rate are both unaffected,

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

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

• 1. and the labor-force participation rate both increase.

Which of the following is the correct formula for calculating the unemployment rate?

• number unemployed/

  number employed x100

• number unemployed/

  labor force x100

• cyclical unemployment/
  number unemployed x100

In 2016 the Bureau of Labor Statistics reported that there were 71.9 million people over age 25 who had at least a bachelor's degree. Of these 52.1 million were employed and 1.3 million were unemployed. What were the labor-force participation rate and the unemployment rate for this group?

• 72.5% and 2.4%

• 74.3% and 2.4%

• 1. 72.5% and 1.8%

• 1. 74.3% and 1.8%

Frictional unemployment can be the consequence of

• one industry declining while another is growing.

• workers leaving existing jobs to find ones they like better.

• changes in the working conditions offered by competing firms.

• All of the above are correct.

Unemployment insurance tends to

• 1. increase frictional unemployment.

• decrease structural unemployment.

• 1. decrease cyclical unemployment.

• 1. increase the number of discouraged workers.

An increase in the minimum wage above the equilibrium wage

• increases structural unemployment.

• 1. increases frictional unemployment.

• 1. reduces frictional unemployment,

• reduces structural unemployment.

Wages in excess of their equilibrium level help explain

• both structural unemployment and the natural rate of unemployment.

• structural unemployment but not the natural rate of unemployment.

• 1. neither structural unemployment nor the natural rate of unemployment.

• 1. the natural rate of unemployment but not structural unemployment.