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Exam 28: Unemployment and Its Natural Rate

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Question 161

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Efficiency wages

A) increase productivity and reduce unemployment.
B) increase productivity but increase unemployment.
C) decrease productivity but reduce unemployment.
D) decrease productivity and increase unemployment.

E) B) and C)
F) A) and C)

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Question 162

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The unemployment that results from the process of matching workers and jobs is called frictional unemployment.

A) True
B) False

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Question 163

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Table 28-5 2015 Labor Data for Tajnia $\begin{array} { | l | l | } \hline \text { Number of adults employed } & 10,000 \\\hline \text { Number of adults unemployed } & 2,250 \\\hline \text { Number of adults not in the labor force } & 17,750 \\\hline\end{array}$ -Refer to Table 28-5. The labor-force participation rate of Tajnia in 2015 is about 33.3 percent.

Every week, the Bureau of Labor Statistics produces data on unemployment.

Unions are often thought to cause conflict between different groups of workers -- between the insiders who benefit from high union wages and the outsiders who do not get the union jobs.

Who of the following is not included in the Bureau of Labor Statistics' "employed" category?

Figure 28-3 ​ -Refer to Figure 28-3. At a minimum wage of $125, how much is the surplus of labor?

The natural rate of unemployment includes

The adult population must equal the sum of the employed and the unemployed.

Table 28-5 2015 Labor Data for Tajnia $\begin{array} { | l | l | } \hline \text { Number of adults employed } & 10,000 \\\hline \text { Number of adults unemployed } & 2,250 \\\hline \text { Number of adults not in the labor force } & 17,750 \\\hline\end{array}$ -Refer to Table 28-5. The unemployment rate of Tajnia in 2015 is about 18.4 percent.

When a union raises the wage above the equilibrium level, it reduces the quantity of labor supplied and raises the quantity of labor demanded, resulting in unemployment.

Studies have shown that the design of the unemployment insurance system reduces the job search effort of the unemployed.

Table 28-7 The table below lists the number of people by labor force classification for the country of Springfield. $\begin{array} { | l | l | } \hline \text { Employed } & 78 \text { million } \\\hline \text { Part-time employed } & 22 \text { million } \\\hline \text { Unemployed } & 12 \text { million } \\\hline \text { Marginally attached } & 3 \text { million } \\\hline \text { Not in the Labor Force } & 30 \text { million } \\\hline \text { Discouraged } & 4 \text { million } \\\hline\end{array}$ -Refer to Table 28-7. Calculate the U-5 unemployment rate.

Within the U.S. population, teenagers (ages 16-19) have similar rates of unemployment to adults of prime working age (ages 25-54), regardless of race or gender.

Explain the effect of right-to-work laws on the collective bargaining power of labor unions.

Most people rely primarily on income other than their labor earnings to maintain their standard of living.

Most spells of unemployment are long, and most unemployment observed at any given time is long-term.

Some economists have argued that unemployment insurance improves the ability of the economy to match each worker with the most appropriate job.

Structural unemployment is often thought to explain relatively long spells of unemployment.

The Bureau of Labor Statistics' U-1 measure of joblessness is smaller than its U-6 measure of joblessness.