Which of the following statements is FALSE?
A. the availability of unemployment benefits reduces the natural rate of unemployment
B. the natural rate of unemployment can be reduced by policies designed to affect the composition of the labor force
C. high rates of unemployment often have a way of perpetuating themselves
D. the unemployment rate among white males 20 years and older is lower than the overall unemployment rate
E. even when the economy is at the full-employment level of output, some frictional unemployment still exists
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The natural rate of unemployment is
A. zero since everyone who is unemployed is voluntarily unemployed
B. determined in part by labor market frictions as people changes careers, etc.
C. rarely more than 3 percent
D. the amount of unemployment caused by an average recession
E. generally the result of misguided government policy
The ill effects of unemployment are often more severe than official data suggest since
A. the natural rate of unemployment is not accounted for
B. much of the unemployment that is reported is structural
C. over 50 percent of the unemployed are unemployed for more than half a year
D. the incidence of unemployment, both in frequency and duration, is spread unevenly throughout the population
E. workers who enter the labor force for the first time are not counted as unemployed
The natural rate of unemployment can be reduced by
A. expansionary monetary policies, but this would create more inflation
B. expansionary fiscal policies, such as an income tax decrease
C. restrictive fiscal policies designed to balance the federal budget
D. training and skills programs that focus on teenagers and the long-term unemployed
E. none of the above
Some evidence suggests that prolonged periods of high unemployment actually increase the natural unemployment rate. This phenomenon is known as
A. Okun's law
B. structural unemployment
C. unemployment hysteresis
D. the misery effect
E. the long-term unemployment effect
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