Question 1

Which of the following may shift the labor supply curve?

Accepted Answer

A)  an increase in worker productivity 
B)  a decrease in the value people place on their time 
C)  an increase in the price of the output of the firm 
D)  an increase in the corporate tax rate 
A)  an increase in worker productivity 
B)  a decrease in the value people place on their time 
C)  an increase in the price of the output of the firm 
D)  an increase in the corporate tax rate

Question 2

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. If the economy is at Point A, the cost of raw material increased dramatically, and the aggregate demand did not change, the economy could move to Point

Accepted Answer

A)  A. 
B)  B. 
C)  E. 
D)  D. 
A)  A. 
B)  B. 
C)  E. 
D)  D.

Question 3

If you hear a person saying "I lost my job because I was replaced by a machine," you should conclude that this person is ________ unemployed.

Accepted Answer

A)  cyclically 
B)  structurally 
C)  frictionally 
D)  seasonally 
A)  cyclically 
B)  structurally 
C)  frictionally 
D)  seasonally

Question 4

If, when recovering from an inflationary period, the inflation rate declines and the unemployment rate also declines, this could be the result of

Accepted Answer

A)  aggregate supply increasing at a faster rate than aggregate demand is decreasing. 
B)  aggregate supply increasing at a slower rate than aggregate demand is decreasing. 
C)  aggregate supply decreasing at a faster rate than aggregate demand is decreasing. 
D)  aggregate supply decreasing at a faster rate than aggregate demand is increasing. 
A)  aggregate supply increasing at a faster rate than aggregate demand is decreasing. 
B)  aggregate supply increasing at a slower rate than aggregate demand is decreasing. 
C)  aggregate supply decreasing at a faster rate than aggregate demand is decreasing. 
D)  aggregate supply decreasing at a faster rate than aggregate demand is increasing.

Question 5

Suppose that air traffic controllers, whose wages have been locked into place by a two-year contract, are laid off during a recession. This example is consistent with the

Accepted Answer

A)  social contract explanation of unemployment. 
B)  explicit contract explanation of unemployment. 
C)  efficiency wage explanation of unemployment. 
D)  relative-wage explanation of unemployment. 
A)  social contract explanation of unemployment. 
B)  explicit contract explanation of unemployment. 
C)  efficiency wage explanation of unemployment. 
D)  relative-wage explanation of unemployment.

Question 6

If you hear a person saying "I just relocated to this city after graduating from college and have yet to find an acceptable job in my field," you should conclude that this person is ________ unemployed.

Accepted Answer

A)  cyclically 
B)  structurally 
C)  frictionally 
D)  seasonally 
A)  cyclically 
B)  structurally 
C)  frictionally 
D)  seasonally

Question 7

The relationship between inflation and unemployment is depicted by the

Accepted Answer

A)  aggregate demand curve. 
B)  aggregate supply curve. 
C)  Phillips curve. 
D)  production possibility curve. 
A)  aggregate demand curve. 
B)  aggregate supply curve. 
C)  Phillips curve. 
D)  production possibility curve.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

Structural unemployment

Accepted Answer

A)  arises from the time it takes employers to find appropriate employees. 
B)  is most likely to arise from a recession. 
C)  is less severe during economic downturns. 
D)  is most likely to arise as a result of technological changes. 
A)  arises from the time it takes employers to find appropriate employees. 
B)  is most likely to arise from a recession. 
C)  is less severe during economic downturns. 
D)  is most likely to arise as a result of technological changes.

Question 10

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. The natural rate of unemployment occurs at

Accepted Answer

A)  U0. 
B)  U1. 
C)  U2. 
D)  a level of zero unemployment. 
A)  U0. 
B)  U1. 
C)  U2. 
D)  a level of zero unemployment.

Question 11

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. Along SRPC2, expected inflation equals

Accepted Answer

A)  4%. 
B)  5%. 
C)  6%. 
D)  cannot be determined from the figure. 
A)  4%. 
B)  5%. 
C)  6%. 
D)  cannot be determined from the figure.

Question 12

Refer to the information provided in Figure 28.4 below to answer the question(s) that follow.   Figure 28.4
-Refer to Figure 28.4. If the demand for labor falls from D to D' and wages are sticky on the downward side, there will be unemployment of ________ million.

Accepted Answer

A)  200 
B)  150 
C)  100 
D)  50 
A)  200 
B)  150 
C)  100 
D)  50

Question 13

An increase in the productivity of workers shifts the labor ________ curve to the ________.

Accepted Answer

A)  supply; left 
B)  supply; right 
C)  demand; right 
D)  demand; left 
A)  supply; left 
B)  supply; right 
C)  demand; right 
D)  demand; left

Question 14

Those who believe that wages adjust quickly to clear the labor market also believe that

Accepted Answer

A)  the AS curve is upward sloping. 
B)  the AD curve is steep. 
C)  the AD curve is flat. 
D)  the AS curve is vertical. 
A)  the AS curve is upward sloping. 
B)  the AD curve is steep. 
C)  the AD curve is flat. 
D)  the AS curve is vertical.

Question 15

The minimum wage law contributes to a

Accepted Answer

A)  lower unemployment rate among teenaged workers. 
B)  lower unemployment rate among adult workers. 
C)  higher unemployment rate among high skilled workers. 
D)  higher unemployment rate among teenaged workers. 
A)  lower unemployment rate among teenaged workers. 
B)  lower unemployment rate among adult workers. 
C)  higher unemployment rate among high skilled workers. 
D)  higher unemployment rate among teenaged workers.

Question 16

Which of the following may shift the labor supply curve?

Accepted Answer

A)  an increase in the wage rate 
B)  an increase in the value people place on their time 
C)  an increase in the price of the output of the firm 
D)  an increase in the corporate tax rate 
A)  an increase in the wage rate 
B)  an increase in the value people place on their time 
C)  an increase in the price of the output of the firm 
D)  an increase in the corporate tax rate

Question 17

Efficiency wage theory suggests that firms may hold wages above the market clearing rate because

Accepted Answer

A)  they believe that the productivity of workers increases with the wage rate. 
B)  unspoken agreements between workers and firms are in place. 
C)  it is required by law that they do so. 
D)  long-term contracts fix wage rates for a period of one to three years. 
A)  they believe that the productivity of workers increases with the wage rate. 
B)  unspoken agreements between workers and firms are in place. 
C)  it is required by law that they do so. 
D)  long-term contracts fix wage rates for a period of one to three years.

Question 18

If cost-of-living adjustments are written into labor contracts, wage raises are higher the greater the inflation rate.

Accepted Answer

A) True 
 B)False

Question 19

When a firm pays higher wages for its workers to improve workers' productivity, the firm pays

Accepted Answer

A)  sticky wages. 
B)  flexible wages. 
C)  efficiency wages. 
D)  minimum wages. 
A)  sticky wages. 
B)  flexible wages. 
C)  efficiency wages. 
D)  minimum wages.

Question 20

The long-run Phillips curve corresponds to the natural rate of unemployment.

Accepted Answer

A) True 
 B)False

Exam 28: The Labor Market in the Macroeconomy

Which of the following may shift the labor supply curve?

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. If the economy is at Point A, the cost of raw material increased dramatically, and the aggregate demand did not change, the economy could move to Point

If you hear a person saying "I lost my job because I was replaced by a machine," you should conclude that this person is ________ unemployed.

If, when recovering from an inflationary period, the inflation rate declines and the unemployment rate also declines, this could be the result of

Suppose that air traffic controllers, whose wages have been locked into place by a two-year contract, are laid off during a recession. This example is consistent with the

If you hear a person saying "I just relocated to this city after graduating from college and have yet to find an acceptable job in my field," you should conclude that this person is ________ unemployed.

The relationship between inflation and unemployment is depicted by the

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

Structural unemployment

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. The natural rate of unemployment occurs at

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. Along SRPC2, expected inflation equals

Refer to the information provided in Figure 28.4 below to answer the question(s) that follow. Figure 28.4 -Refer to Figure 28.4. If the demand for labor falls from D to D' and wages are sticky on the downward side, there will be unemployment of ________ million.

An increase in the productivity of workers shifts the labor ________ curve to the ________.

Those who believe that wages adjust quickly to clear the labor market also believe that

The minimum wage law contributes to a

Which of the following may shift the labor supply curve?

Efficiency wage theory suggests that firms may hold wages above the market clearing rate because

If cost-of-living adjustments are written into labor contracts, wage raises are higher the greater the inflation rate.

When a firm pays higher wages for its workers to improve workers' productivity, the firm pays

The long-run Phillips curve corresponds to the natural rate of unemployment.

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Elasticity

Household Behavior and Consumer Choice

The Production Process: the Behavior of Profit-Maximizing Firms

Short-Run Costs and Output Decisions

Long-Run Costs and Output Decisions

Input Demand: The Labor and Land Markets

Input Demand: The Capital Market and the Investment Decision

General Equilibrium and the Efficiency of Perfect Competition

Monopoly and Antitrust Policy

Oligopoly

Monopolistic Competition

Externalities, Public Goods, and Common Resources

Uncertainty and Asymmetric Information

Income Distribution and Poverty

Public Finance: The Economics of Taxation

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

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. Along SRPC₂, expected inflation equals

An increase in the productivity of workers shifts the labor curve to the .