Exam 28: The Labor Market in the Macroeconomy

Refer to the information provided in Figure 28.7 below to answer the question(s) that follow. Figure 28.7 -Refer to Figure 28.7. Which combinations of events could move the economy from Point A to Point B, and then from Point B to Point E?

What sequence of events results from a decrease in aggregate demand?

When ________, the price level rises, inventories decrease and firms respond by increasing output and employment.

The economy experiences both inflation and unemployment when

Minimum wage laws contribute to a higher unemployment rate by

Refer to the information provided in Figure 28.2 below to answer the question(s) that follow. Figure 28.2 -Refer to Figure 28.2. Assume that the productivity of workers decreases as the wage rate decreases. The efficiency wage

Refer to the information provided in Figure 28.1 below to answer the question(s) that follow. Figure 28.1 -Refer to Figure 28.1. At a wage rate of $________, there is a shortage of labor equal to ________ million people.

If, as a result of imperfect information, firms set their wage rates below the market clearing wage rate

One of the tenets of the classical view of the labor market is that the ________ adjustments are necessary to clear the labor market.

The type of unemployment that is most likely to arise as a result of technological changes is

Refer to the information provided in Figure 28.6 below to answer the question(s) that follow. Figure 28.6 -Refer to Figure 28.6. Panel B represents the typical shape of the

implicit contracts are employment contracts that stipulate workers' wages for a specific period of time, usually 1 to 3 years.

Changes in the ________ market affect the shape of the short run aggregate supply curve.

At the natural rate of unemployment, frictional unemployment is zero.

Minimum wage laws contribute to a ________ unemployment rate by raising wages above the market clearing level in some labor markets.

Refer to the information provided in Figure 28.8 below to answer the question(s) that follow. Figure 28.8 -Refer to Figure 28.8. Expected inflation at Point D ________ expected inflation at Point C.

The labor force includes those people with a job and

If the ________ curve shifts from year to year and the ________ curve does not, then the Phillips curve would show a positive relationship between inflation and unemployment rates.

If inflation expectations change, a contractionary fiscal policy causes

Refer to the information provided in Figure 28.7 below to answer the question(s) that follow. Figure 28.7 -Refer to Figure 28.7. Which combinations of events could move the economy from Point A to Point C, and then from Point C to Point D?