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Exam 15: Unemployment

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Question 251

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One reason economies always experience some unemployment is job search.

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B) False

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Question 252

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The Bureau of Labor Statistics' U-1 measure of joblessness includes only very long-term unemployed.

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Question 253

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Table 15-4 $\begin{array}{|l|l|}\hline \text { Civilian labor force } & 100 \text { million } \\\hline \text { Persons unemployed } 15 \text { weeks or longer } & 1.6 \text { million } \\\hline \text { Job losers and persons who have completed temporary jobs (excludes job leavers) } & 3.1 \text { million } \\\hline \text { Total unemployed } & 6.2 \text { million } \\\hline \text { Total unemployed plus discouraged workers } & 7.0 \text { million } \\\hline \text { Total unemployed plus all marginally attached workers } & 8.1 \text { million } \\\hline \begin{array}{l}\text { Total unemployed plus all marginally attached workers plus total employed part-time for } \\\text { economic reasons }\end{array} & 9.2 \text { million } \\\hline\end{array}$ -Refer to Table 15-4. What is the U-1 measure of labor underutilization?

The natural rate of unemployment is constant over time.

Only paid workers are included in the Bureau of Labor Statistics' "employed" category.

When unions raise wages in one part of the economy, the supply of labor increases in other parts of the economy, which reduces wages in industries that are not unionized.

Table 15-5 2010 Labor Data for Tajnia $\begin{array} { | l | l | } \hline \text { Number of adiults employed } & 10,000 \\\hline \text { Number of adults unemployed } & 2,250 \\\hline \text { Number of atults not in the labar force } & 17,750 \\\hline\end{array}$ -Refer to Table 15-5. The total adult population of Tajnia in 2010 is 30,000.

A century ago, the four industries with the largest employment in the United States were cotton goods, woolen goods, men's clothing, and lumber.

Why might a favorable change in the economy, such as technological improvement or a decrease in the price of imported oil, be associated with an increase in frictional unemployment?

If the number of people unemployed rose but the number of people employed and the adult population stayed the same, then the labor force participation rate would rise.

If the wage is kept above the equilibrium level because of minimum-wage laws, then the result is unemployment; if the wage is kept above the equilibrium level for some other reason, the result need not be unemployment.

Suppose that butchers and bakers have no unions. Now suppose the butchers form a union. What does this do the labor supply of and wages of bakers?

More than one-third of the unemployed are recent entrants into the labor force.

Meredith is looking for work as a computer programmer. Although her prospects are good, she hasn't yet taken a job. Julie is looking for work in a steel mill. Every time she shows up for an interview, there are more people looking for work than their are openings. Someone waiting in line with her tells her it has been that way for a long time.

Evidence from research studies by economists

Table 15-4 $\begin{array}{|l|l|}\hline \text { Civilian labor force } & 100 \text { million } \\\hline \text { Persons unemployed } 15 \text { weeks or longer } & 1.6 \text { million } \\\hline \text { Job losers and persons who have completed temporary jobs (excludes job leavers) } & 3.1 \text { million } \\\hline \text { Total unemployed } & 6.2 \text { million } \\\hline \text { Total unemployed plus discouraged workers } & 7.0 \text { million } \\\hline \text { Total unemployed plus all marginally attached workers } & 8.1 \text { million } \\\hline \begin{array}{l}\text { Total unemployed plus all marginally attached workers plus total employed part-time for } \\\text { economic reasons }\end{array} & 9.2 \text { million } \\\hline\end{array}$ -Refer to Table 15-4. What is the U-2 measure of labor underutilization?

The Bureau of Labor Statistics' U-2 measure of joblessness includes job losers and job leavers.

Table 15-1 Labor Data for Aridia $\begin{array} { | l | c | c | c | } \hline \text { Year } & \mathbf { 2 0 1 0 } & \mathbf { 2 0 1 1 } & \mathbf { 2 0 1 2 } \\\hline \text { Adult population } & 2000 & 3000 & 3200 \\\hline \text { Number of emplayed } & 1400 & 1300 & 1600 \\\hline \text { Number of unemplayed } & 200 & 600 & 200 \\\hline\end{array}$ -Refer to Table 15-1. The labor-force participation rate of Aridia in 2012 was

The unemployment rate reported by the Bureau of Labor Statistics clearly understates the true unemployment rate.

Some people who are employed or who are not making serious effort to find employment will report themselves as unemployed. Some people who want to find work will be counted as out of the labor force.