Chat with AIExam 6: The Labour Market
What effect does the existence of discouraged workers have on the ability of the official unemployment rate to provide accurate information about the extent to which labour is employed?
(36) 
VerifiedDiscouraged workers are individuals who have stopped searching for employment because, for example, they have become "discouraged" with the prospects of finding employment. Once they stop searching, they are no longer counted as unemployed and, therefore, in the labour force. Such a dynamic would cause the official unemployment to decrease. This explains why the existence of discouraged workers can cause the unemployment rate to be an imperfect measure of the utilisation of labour. In fact, many discouraged workers would accept job offers when they arise even though they are not actively seeking employment in the labour market. Hence economists sometimes look at the employment rate as an additional measure to supplement our understanding of the state of the labour market. The employment rate is the ratio of employment to population available for work.
Explain what effect an increase in the unemployment rate has on the real wage based on: (1) the WS relation; and (2) the PS relation.
(24) VerifiedAn increase in the unemployment rate will decrease bargaining power, decrease the nominal wage, and therefore decrease the real wage based on wage- setting behaviour. Changes in the unemployment rate have no effect on the real wage based on price- setting behaviour.
Explain how an increase in the unemployment rate will affect bargaining power and nominal wages.
(27) Which of the following variables is most directly determined in the labour market?
(24) Labour productivity is represented by which of the following?
(29) Which of the following individuals would be considered unemployed?
(29) The Australian Labour Force Survey interviews approximately how many households each month?
(29) For this question, assume that Y = N. Based on our understanding of the labour market model, we know that an increase in the minimum wage will cause:
(30) Based on the price- setting behaviour, we know that a decrease in the unemployment rate will cause:
(32) Explain several implications and characteristics of efficiency wage theories.
(28) Assume product markets become more competitive in Australia. Given this information, we would expect to observe which of the following?
(45) A decrease in unemployment benefits will tend to cause which of the following?
(31) An increase in the minimum wage will tend to cause which of the following?
(39) In the wage setting relation W = PeF (u, z), the variable z includes which of the following variables?
(26) Based on your understanding of the labor market model, explain what types of policies could be implemented to generate a decrease in the natural rate of unemployment.
(36) Which of the following is the distortionary effect of higher taxes?
(33) Suppose the aggregate production function is given by Y = AN. Given this information, we know that labour productivity is represented by:
(31) Suppose the aggregate production function is given by Y = N. Given this information, we know that labour productivity is represented by:
(34) 
Filters
- Essay(0)
- Multiple Choice(0)
- Short Answer(0)
- True False(0)
- Matching(0)