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Multiple Choice Quiz
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1
A person is in the labor force if they:
A)Are employed
B)Are unemployed
C)Are actively looking for work
D)All of the above
2
Which of the following individuals is unemployed?
A)Angela lost her job and is now looking for work
B)Raymond is between jobs and is currently not looking for a new job
C)Amy is a full time homemaker
D)Dan looked for a job for a year and then gave up
3
A person is "out of the labor force" if:
A)They are employed but are currently looking for a better job
B)They are laid off and looking for work
C)They are retired
D)They voluntarily quit and are looking for a job
4
When an economy enters a recession:
A)Unemployment falls
B)Structural unemployment increases
C)Frictional unemployment increases
D)Cyclical unemployment increases
5
Institutional constraints on our ability to produce goods include:
A)Environmental restrictions
B)Child labor laws
C)Educational requirements
D)All of the above
6
If there is cyclical unemployment:
A)We are producing at a point on the production possibilities frontier
B)We are producing beyond our productive capacity
C)We are producing at a point inside the production possibilities frontier
D)We have eliminated institutional constraints on our ability to produce output.
7
The unemployment rate is calculated by:
A)Adding the number of people unemployed and employed
B)Dividing the number of people who are unemployed by the labor force
C)Dividing the number of people who are unemployed by the population
D)Calculating how many people applied for unemployment compensation
8
Which of the following is an example of structural unemployment?
A)An aerospace engineer is laid off due to defense cutbacks
B)A person loses a job due to a recession
C)Construction workers on the East Coast are laid off due to recession
D)A student is looking for a job for the first time
9
Cyclical unemployment increases when:
A)There is a mismatch between job openings and job applicants
B)More college graduates look for their first jobs
C)Total demand for goods in the economy falls
D)There are lay offs due to weather changes
10
Which of the following programs would be helpful for structural unemployment?
A)Policies that stimulate economic growth
B)Policies that extend health insurance benefits
C)Policies that raise the minimum wage
D)Policies that provide job training
11
Full employment is defined as:
A)Zero unemployment
B)Zero frictional unemployment
C)The lowest unemployment compatible with price stability
D)Everyone has a job
12
The unemployment rate can be overstated if:
A)The number of the phantom unemployed increases
B)The number of underemployed increases
C)The number of discouraged workers increases
D)There are more discouraged workers
13
Which economic problem often occurs as the unemployment rate falls?
A)Cyclical unemployment
B)Inflation
C)Economic growth falls
D)We move to a point inside the production possibility frontier
14
Outsourcing:
A)Represents more than 600,000 jobs lost each year
B)In the short run can hurt the U.S. employment picture
C)Is not compensated by "in-sourcing"
D)Raises the cost of production for outsourcing firms
15
The historical record of unemployment in the United States shows:
A)A sharp fall in unemployment during WWII
B)A fall in unemployment in 2001
C)A rise in unemployment in the late 1990's
D)All of the above





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