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Exam 28: Unemployment and Its Natural Rate

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Question 21

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In terms of duration, how does cyclical unemployment differ from structural unemployment?

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Cyclical unemploymen...

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Question 22

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Efficiency wages create structural unemployment.

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Table 28-2 Suppose people in the adult population in a small country are classified based on their age. ​ ​ ​ -Refer to Table 28-2. In the proper order, which age group has the highest unemployment rate and which has the highest labor-force participation rate?

Every adult who was not employed during the previous four weeks is included in the Bureau of Labor Statistics' "unemployed" category.

An economy's natural rate of unemployment is the

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-4 unemployment rate.

Minimum wage laws help explain the natural rate of unemployment if they create a surplus in any labor market.

Economists at the Congressional Budget Office estimated that for 2015, the U.S. natural rate of unemployment was about 4.9 percent.​

In the U.S., it is illegal for employers to interfere when workers try to organize unions.

Provide a definition of the natural rate of unemployment.

The amount of unemployment varies

Give an historical example of an efficiency wage that was considered by the firm to be "one of the finest cost-cutting moves we ever made."

Unemployment insurance reduces the incentive for the unemployed to find and take new jobs.

Figure 28-3 ​ -Refer to Figure 28-3. If the minimum wage increases from $100 to $125, how many additional workers will be unemployed?

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

A firm might offer efficiency wages in order to attract a better pool of applicants.

An economist claims that changes in information technology and unemployment insurance have reduced unemployment. Which of these changes affect frictional unemployment?

The Bureau of Labor Statistics' household survey and establishment survey both yield information about unemployment.

Advocates of unions contend that unions are a necessary antidote to the market power of the firms that hire workers and that unions are important for helping firms respond efficiently to workers' concerns.

There are always some workers without jobs, even when the overall economy is doing well.