Exam 28: The Labor Market in the Macroeconomy

Refer to the information provided in Figure 28.3 below to answer the question(s) that follow. Figure 28.3 -Refer to Figure 28.3. A firm might pay wages above $10 per hour if it believes such a wage will result in all of the following except

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

According to the classical economists, those who are not working

The Phillips curve suggests that if we want to lower the unemployment rate, we must accept a lower inflation rate in return.

Suppose that due to an increase in the price of steel, Chrysler had to raise prices on its automobiles, and as a result its sales declined. Due to the decline in sales, Chrysler chose to lay off some employees rather than cut employee wages because of an unspoken agreement between its employees and Chrysler executives that wages would not be reduced. This example is consistent with the

If productivity increases as wages increase and firms pay a wage ________ the market clearing wage, then a potential benefit these firms may receive is a(n) ________ in employee turnover.

The United States began to pull out of a recession in the spring of 1991. Unemployment fell, but inflation did not increase. What was the most likely cause of this?

Suppose the wage rate in the labor market is $20 and the demand for labor increases. If wages are sticky

If the ________ curve shifts from year to year and the ________ curve does not, then the short run Phillips curve would be downward sloping.

Cost of living adjustments in labor contracts offer no protection to workers from unexpected inflation.

The classical view of the labor market is basically consistent with the assumption of ________ aggregate supply curve.

The ________ unemployment rate can be pushed below the ________ rate, but only in the short run and not without inflation.

There is ________ relationship between the price level and the level of aggregate output when both aggregate supply and aggregate demand are changing simultaneously.

As the unemployment rate decreases in response to the economy moving toward capacity output, the aggregate price level

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. An contractionary monetary policy followed by a rightward shift in the AS curve could move the economy from Point A to Point ________, and then to Point ________.

At equilibrium in the labor market, prices and wages reflect a trade-off between the value households place on outputs and the value of time spent in leisure and nonmarket activities.

The unemployment rate is the fraction of the labor force without a job.

There is no systematic relationship between the price level and the level of aggregate output when

Which of the following arguments is not offered to explain the existence of "sticky" wages?

According to the relative-wage explanation of unemployment, workers will be willing to accept wage cuts only if