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
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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
Generous unemployment benefits may actually lead to an increase in the measured rate of unemployment since
A. people who are not really looking for jobs may report themselves as unemployed to collect unemployment benefits
B. receiving unemployment benefits reduces the opportunity costs of looking for a better job even after a job offer may have been made
C. firms are more likely to lay off workers knowing that the consequences of being unemployed are not too severe
D. unemployment benefits increase the replacement ratio and that, in turn, affects the reservation wage
E. all of the above
When we look at unemployment in the United States, which of the following statements is most accurate?
A. flows into and out of the unemployment pool tend to be fairly small relative to the actual number of unemployed
B. variations in the unemployment rates are fairly small across groups defined by age, gender, or race
C. the average duration of unemployment for the majority of unemployed tends to be more than half a year long
D. the average duration of unemployment was higher in the period of between 1975 and 1985 than it was between 1995 and 2005
E. the unemployment rates during the recessions of 1981/82 and 2001/02 were lower than the rate during the Great Recession of 2007-09
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