Eco Exam 3

quiz questions

In the 1990s Ireland made unemployment benefits less generous. This change would likely have reduced

 

A. both frictional unemployment and the natural rate of unemployment.

 

B. frictional unemployment but not the natural rate of unemployment.

 

C. structural unemployment but not the natural rate of unemployment.

 

D. both structural unemployment and the natural rate of unemployment.

A

When a country keeps its workers as fully employed as possible, it achieves a higher level of GDP than if many of its workers were idle.

 

A. True

 

B. False

A

Critics of government-run employment agencies and public training programs argue that the private market is better at matching workers and jobs than the government is.

 

A. True

 

B. False

A

Over the past several decades in the United States, the labor-force participation rate of women has increased and the labor-force participation rate of men had remained steady.

 

A. True

 

B. False

B

The labor-force participation rate tells us the fraction of the population that has chosen to participate in the labor market.

 

A. True

 

B. False

A

It is best to view the official unemployment rate as a useful but imperfect measure of joblessness.

 

A. True

 

B. False

A

Right-to-work laws

 

A. guarantee workers the right to form unions.

 

B. prevent workers from being fired because of increases in wages brought about by collective bargaining.

 

C. give workers in a unionized firm the right to choose whether to join the union.

 

D. prevent employers from hiring permanent replacements for workers who are on strike.

C

Every week, the Bureau of Labor Statistics produces data on unemployment.

 

A. True

 

B. False

B

People who report being not in the labor force but who, in fact, want to work but have given up trying to find a job after an unsuccessful search cause the reported unemployment rate to be lower than it would otherwise be.

 

A. True

 

B. False

A

The unemployment that results from the quantity of labor supplied exceeding the quantity demanded is called structural unemployment.

 

A. True

 

B. False

A

Government-run employment agencies and public training programs both seek to reduce frictional unemployment.

 

A. True

 

B. False

A

The unemployment that results from the process of matching workers and jobs is called frictional unemployment.

 

A. True

 

B. False

A

When job search is the explanation for unemployment, workers are searching for the jobs that best suit their tastes and skills, but when the wage is above the equilibrium level, the quantity of labor supplied exceeds the quantity of labor demanded, and workers are unemployed because they are waiting for jobs to open up.

 

A. True

 

B. False

A

Over the past several decades, the difference between the labor-force participation rates of men and women in the U.S. has

 

A. been eliminated.

 

B. remained constant.

 

C. gradually increased.

 

D. gradually decreased.

D

In the early 1900s, Henry Ford introduced a

 

A. high-wage policy, and this policy produced many of the effects predicted by efficiency-wage theory.

 

B. low-wage policy, and this policy produced none of the effects predicted by efficiency-wage theory.

 

C. low-wage policy, and this policy produced many of the effects predicted by efficiency-wage theory.

 

D. high-wage policy, and this policy produced none of the effects predicted by efficiency-wage theory.

A

Unpaid stay-at-home fathers are included in the Bureau of Labor Statistics’ “unemployed” category.

 

A. True

 

B. False

B

The unemployment rate equals the percentage of the adult population that is unemployed.

 

A. True

 

B. False

B

Cyclical unemployment refers to the year-to-year fluctuations in unemployment around its natural rate.

 

A. True

 

B. False

A

Commodity money cannot be used as a unit of account.

 

A. True

 

B. False

B

If the Fed raised the reserve requirement, the demand for reserves would

 

A. increase, so the federal funds rate would rise.

 

B. decrease, so the federal funds rate would fall.

 

C. increase, so the federal funds rate would fall.

 

D. decrease, so the federal funds rate would rise.

A

The chair of the Board of Governors regularly testifies to Congress about Fed policy.

 

A. True

 

B. False

A

​Under a 100-percent-reserve banking system, banks do not influence the supply of money.

 

A. True

 

B. False

A

If the public decides to hold more currency and fewer deposits in banks, bank reserves

 

A. decrease but the money supply does not change.

 

B. decrease and the money supply eventually decreases.

 

C. increase and the money supply eventually increases.

 

D. increase but the money supply does not change.

B

The Federal Reserve primarily uses open-market operations to change the money supply.

 

A. True

 

B. False

A

David and Asher buy the same pair of sneakers, but each in the wrong size. David proposes a size swap with Asher. This is an example of

 

​A. money, since the sneakers in the correct size do not have any intrinsic value.

 

​B. barter, since the sneakers in the correct size represent a medium of exchange.

 

​C. barter, since the sneakers in the correct size have intrinsic value to both David and Asher.

 

D. money, since the sneakers in the correct size represent a medium of exchange. 

C

Emily compares the prices of two laptops before deciding which one to buy.

A. Medium of Exchange

B. Store of Value

C. Unit of Account

C

Duke receives his paycheck and uses the money to pay his rent.

A. Medium of Exchange

B. Store of Value

C. Unit of Account

A

Lorelei keeps part of her paycheck in a safe place so she can use it for a vacation next year.

A. Medium of Exchange

B. Store of Value

C. Unit of Account

B