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Quiz 507
1. Job search
a. is one reason economies always experience some unemployment.
b. is the process of matching workers with appropriate jobs.
c. would not be a problem if all workers and all jobs were the same.
d. All of the above are correct.
2. If all workers and all jobs were the same such that all workers were equally well suited for all
jobs, then there would be no
a. cyclical unemployment.
b. frictional unemployment.
c. natural rate of unemployment.
d. structural unemployment.
4. 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.
5. Suppose that consumers decide to walk to work more frequently and drive cars less.
Companies that make walking shoes hire workers, while automobile companies lay off workers.
This is an example of
a. frictional unemployment created by sectoral shifts.
b. frictional unemployment created by efficiency wages.
c. structural unemployment created by efficiency wages.
d. structural unemployment created by sectoral shifts.
6. Suppose that because of the popularity of the low-carb diet, bakeries need fewer workers and
steak houses need more workers. The unemployment created by this change is
a. frictional unemployment created by efficiency wages.
b. frictional unemployment created by sectoral shifts.
c. structural unemployment created by efficiency wages.
d. structural unemployment created by sectoral shifts.
7. Suppose the demand for hard-wood flooring increases, while the demand for wall-to-wall
carpeting decreases. Based on this change in consumer tastes, the demand for hard-wood-
flooring factory workers in North Carolina increases, while the demand for carpet factory
workers in Georgia decreases. This is an example of
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.
9. The invention of the telegraph led to the loss of jobs for those who had delivered mail by horse
but created jobs for telegraph operators and delivery persons. This is an example of
a. structural unemployment created by efficiency wages.
b. structural unemployment created by sectoral shifts.
c. frictional unemployment created by efficiency wages.
d. frictional unemployment created by sectoral shifts.
10. Suppose that the Bureau of Labor Statistics predicts that the number of jobs for dental
hygienists will grow faster than most occupations while the number of jobs for bookbinders will
decline. This change in the labor market could lead to
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.
16. Policies that reduce the time it takes unemployed workers to find new jobs
a. can reduce both frictional unemployment and the natural rate of unemployment.
b. can reduce frictional unemployment, but they cannot reduce the natural rate of unemployment.
c. cannot reduce frictional unemployment, but they can reduce the natural rate of unemployment.
d. cannot reduce either frictional unemployment or the natural rate of unemployment.
18. Which of the following does not help reduce frictional unemployment?
a. government-run employment agencies
b. public training programs
c. unemployment insurance
d. All of the above help reduce frictional unemployment.
19. Providing training for unemployed individuals is primarily intended to reduce
a. frictional unemployment.
b. seasonal unemployment.
c. structural unemployment.
d. cyclical unemployment.
20. Government-run employment agencies and public training programs are operated by the
government to try to facilitate job search and 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. Some economists claim that these programs increase frictional unemployment.
21. Of the following groups, who is eligible for unemployment insurance benefits?
a. the unemployed who quit their jobs
b. the unemployed who were laid off because their previous employers no longer needed their
skills
c. the unemployed who were fired for cause
d. the unemployed who just entered the labor force
22. Lucy quit her job because she was unhappy at work. Genevieve was fired because she
frequently surfed the Internet rather than working on her assigned tasks. Who is eligible for
unemployment insurance benefits?
a. both Lucy and Genevieve
b. Lucy but not Genevieve
c. Genevieve but not Lucy
d. neither Lucy nor Genevieve
23. Wanda quit her job because she was unhappy at work. Arnold was fired from his landscaping
job because his company was downsizing. Who is eligible for unemployment insurance benefits?
a. both Wanda and Arnold
b. Wanda but not Arnold
c. Arnold but not Wanda
d. neither Wanda nor Arnold
28. Economists would predict that, other things the same, the more generous unemployment
compensation a country has, the
a. shorter the duration of each spell of unemployment and the higher the unemployment rate.
b. shorter the duration of each spell of unemployment and the lower the unemployment rate.
c. longer the duration of each spell of unemployment and the higher the unemployment rate.
d. longer the duration of each spell of unemployment and the lower the unemployment rate.
31. In the 1990’s Ireland made unemployment benefits less generous. This change would likely
have reduced
a. both structural unemployment and the natural rate of unemployment.
b. structural unemployment but not the natural rate of unemployment.
c. both frictional unemployment and the natural rate of unemployment.
d. frictional unemployment but not the natural rate of unemployment.
32. Which of the following is correct?
a. Unemployment insurance raises structural unemployment because it reduces the job search
efforts of the unemployed.
b. Most economists are skeptical of the value of unemployment insurance primarily because they
believe that it results in a poorer match between workers and jobs.
c. Studies show that when the unemployed become ineligible for benefits, the probability of their
finding a job rises markedly.
d. All of the above are correct.
34. An economist claims that changes in information technology and unemployment insurance
have reduced unemployment. Which of these changes affect frictional unemployment?
a. both the changes in information technology and unemployment insurance
b. only the changes in information technology
c. only the changes in unemployment insurance
d. neither the changes in information technology nor the changes in unemployment insurance
40. Suppose that a country becomes relatively better than other countries at producing wind
generators, in this country
a. structural unemployment and so the natural rate of unemployment will increase.
b. structural unemployment and so cyclical unemployment will increase.
c. frictional unemployment and so the natural rate of unemployment will increase.
d. frictional unemployment and the cyclical rate of unemployment will increase.
41. If a country signs a trade agreement so that employment in some industries rises and
employment in some industries fall, then
a. structual unemployment rises temporarily.
b. structural unemployment rises permananently.
c. frictional unemployment rises temporarily.
d. frictional unemployment rises permanently.