1. Melinda is looking for work as an accountant. Her prospects are good but she
ID: 1214871 • Letter: 1
Question
1. Melinda is looking for work as an accountant. Her prospects are good but she has not accepted any job offer yet. Jane is looking for work in a sugar factory. Every time she shows up for an interview, there are more people looking for work than there are job openings. Someone waiting in line with her tells her it has been that way for a long time.
A) Melinda is structurally unemployed, and Jane is frictionally unemployed.
B) Melinda is frictionally unemployed, and Jane is structurally unemployed.
C) Melinda and Jane are both frictionally unemployed.
D) Melinda and Jane are both structurally unemployed.
2.
Many people were laid off from work and found themselves unemployed during the Great Recession of 2008. Economists call this type of unemployment
A) fluctuating unemployment.
B) deviant unemployment.
C) cyclical unemployment.
D) the natural rate of unemployment.
3.
According ot the Jan 2004 Current Population Survey conducted by the Bureau of Labor Statistics, the civilian population (16 years and over) in the United States was 222,161,000, the number of employed people was 136,924,000 and the number of people not in the labor force was 76,093,000. What were the unemployment rate and labor force participation rate for that month?
A) 6.3% and 61.6% respectively.
B) 4.1% and 93.7% respectively.
C) 6.5% and 62.6% respectively.
D) 6.3% and 65.7% respectively.
4.
Amy does not currently have a job, but has applied for several jobs in the last two weeks. Edward is an unpaid stay-at-home dad who has not searched for work in recent years. Who is counted as being out of the labor force by the Bureau of Labor Statistics?
A) Edward but not Amy
B) Amy and Edward
C) Amy but not Edward
D) neither Amy nor Edward
5.
Minimum-wage laws, unions, and efficiency wages are the explanations for the
A) the natural rate of unemployment, but not structural unemployment.
B) structural unemployment which does not contribute to the natural rate of unemployment.
C) structural unemployment which contributes to the natural rate of unemployment.
D) frictional unemployment which contributes to the natural rate of unemployment.
6.
What would happen if the government were to raise the amount and duration of the unemployment insurance payments?
A) The frictional unemployment would rise.
B) The structural unemployment would fall.
C) The structural unemployment would rise.
D) The frictional unemployment would fall.
7. Which of the following would be considered commodity money?
A) Euro bills
B) today's dollar bills
C) silver coins
D) "fei" stones used as money on the island of Yap and sitting at the bottom of the ocean
8.
Which of the following are classified as money?
A) checking deposits
B) bonds
C) credit cards
D) stocks
E) All of the above are money.
9.
Imagine that Big Bank has a 5% reserve requirement and $7,000 in deposits. If this bank has loaned out all it can given the reserve requirement, which of the following statements is correct?
A) Big Bank has $35 in reserves and $4,500 in loans.
B) Big Bank has $250 in reserves and $4,750 in loans.
C) Big Bank has $350 in reserves and $6,650 in loans.
D) None of the above statements is correct.
10.
What happens in the case of 100-percent reserve banking?
A) The money multiplier is 0 and banks do not create money.
B) The money multiplier is 1 and banks create money
C) The money multiplier is 0 and banks create money.
D) The money multiplier is 1 and banks do not create money.
Explanation / Answer
Answer 1:
Option B. Since Melinda is searching for jobs, she is frictionally unemployed. Jane is looking for work in sugar factory and the number of unemployed people looking for jobs increases in the sugar factory. So, Jane is structurally unemployed.
Answer 2:
Option C. This is called Keynesian or Cyclical type of unemployment.
Answer 3:
People in the labor force = Total population - people not in the labor force = 146068000
Unemployed people = Labor force - Employed people = 9144000
Unemployment rate = Number of unemployed / Labor force Participation rate * 100
= 6.3 per cent
Labor force participation rate = Number of people in the labor force / Total population * 100
= 146068000 / 222,161,000 * 100 = 65.7 per cent( Option D).
Answer 4:
Option A as Edward is not looking for job while Amy is.
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