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. If the economy is on SRPC₃, then the expected inflation rate is

A firm may benefit by paying workers ________ than the market clearing wage because the higher wages may lead to ________ worker morale.

Intel Corporation, a major manufacturer of microchips, saw the demand for its product drop by 25%. Even though the demand for its product decreased, Intel did not cut the wages of its nonunionized workers. This is an example of

Refer to the information provided in Figure 28.5 below to answer the question(s) that follow. Figure 28.5 -Refer to Figure 28.5. If aggregate demand shifts while aggregate supply is stable, the relationship between the price level and the unemployment rate is represented in Panel

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 ________ and wages are sticky on the downward side, there will be unemployment of 150 million.

Other things equal, the unemployment rate rises if

Efficiency wages may lower employee turnover.

Related to the Economics in Practice on p. 571: According to the study cited in the Economics in Practice, call backs for job postings

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 on SRPC₂, then the expected inflation rate is

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 $9, there is a ________ of labor equal to ________ million people.

Suppose that during a recession, Whirlpool saw the demand for its major appliances fall by one-third. Even though the demand decreased, Whirlpool chose to maintain wages for its non-union employees. This is an example of

If firms start offering more employment benefits, such as more stock options and a better dental plan, we would expect the labor ________ curve to shift to the ________.

If the unemployment rate rises above the natural rate of unemployment in the short run, the inflation rate will rise.

John is contemplating whether he should take a job offered to him. John should

If the aggregate supply is vertical, an (a) ________ in the price level ________ unemployment rate.

According to the ________ explanation of unemployment, workers will be willing to accept wage cuts only if they know that workers in other firms and industries are receiving similar cuts.

If the AD curve shifts from year to year and the AS curve does not, then the short run Phillips curve would be

Suppose that workers in the food service industry go on strike during an economic downturn because they are unwilling to accept a cut in their wages unless they know that workers in other industries are receiving similar wage cuts. This example is consistent with the

The economy experiences both ________ and ________ when aggregate supply decreases and aggregate demand remains unchanged.

Only when the unemployment rate is equal to the nonaccelerating inflation rate of unemployment (NAIRU) is the price level changing at a constant rate.