Question 1

When the capital utilization rate,   , increases then:

Accepted Answer

A) GDP decreases. 
B) machines are in use more hours per period. 
C) (hours per period)•(number of machines) decreases. 
D) all of the above. 
A) GDP decreases. 
B) machines are in use more hours per period. 
C) (hours per period)•(number of machines) decreases. 
D) all of the above.

Question 2

The unemployment rate is:

Accepted Answer

A) the number of workers in the labour force unemployed divided by the number of workers employed. 
B) the number of workers employed divide by the number of workers in the labour force unemployed. 
C) the number of workers in the labour force unemployed divided by the labour force. 
D) the labour force divided by the number of workers in the labour force unemployed. 
A) the number of workers in the labour force unemployed divided by the number of workers employed. 
B) the number of workers employed divide by the number of workers in the labour force unemployed. 
C) the number of workers in the labour force unemployed divided by the labour force. 
D) the labour force divided by the number of workers in the labour force unemployed.

Question 3

The optimal capital utilization rate,   , is that   where:

Accepted Answer

A) (R/P)• - ( ) is maximized. B) (R/P)• = ( ) C) (R/P)• > ( ) D) (R/P)• < ( ) A) (R/P)• - ( ) is maximized. B) (R/P)• = ( ) C) (R/P)• > ( ) D) (R/P)• < ( )

Question 4

In the model, the natural rate of unemployment is:

Accepted Answer

A) negatively related to that job separations rate. 
B) zero. 
C) fixed. 
D) negatively related to the job finding rate. 
A) negatively related to that job separations rate. 
B) zero. 
C) fixed. 
D) negatively related to the job finding rate.

Question 5

If the labour force is 100 million, there are 95 million people employed, there are 98 million jobs that employers want occupied, vacancy rate is:

Accepted Answer

A) 5%. 
B) 3.2%. 
C) 3.1%. 
D) 3%. 
A) 5%. 
B) 3.2%. 
C) 3.1%. 
D) 3%.

Question 6

Unemployment can exist in a market clearing model, if:

Accepted Answer

A) there are frictions in the labour market. 
B) it takes some search time for workers to find jobs. 
C) we allow for differences among workers and jobs. 
D) all of the above. 
A) there are frictions in the labour market. 
B) it takes some search time for workers to find jobs. 
C) we allow for differences among workers and jobs. 
D) all of the above.

Question 7

A worker will accept a job offer, if the real wage offer is above:

Accepted Answer

A) the worker's effective real income when unemployed,   . 
B) the wage the worker earned in their last job. 
C) the worker's reservation wage. 
D) the average wage in the economy. 
A) the worker's effective real income when unemployed,   . 
B) the wage the worker earned in their last job. 
C) the worker's reservation wage. 
D) the average wage in the economy.

Question 8

If the job separation rate is 0.02 and the job finding rate is 0.3, then the natural rate of unemployment is:

Accepted Answer

A) 6.25% 
B) 15% 
C) 6.67% 
D) none of the above. 
A) 6.25% 
B) 15% 
C) 6.67% 
D) none of the above.

Question 9

After the capital utilization rate,   , is included in the model, the interest rate:

Accepted Answer

A) is still procyclical. 
B) is still countercyclical. 
C) becomes procyclical. 
D) becomes countercyclical. 
A) is still procyclical. 
B) is still countercyclical. 
C) becomes procyclical. 
D) becomes countercyclical.

Question 10

Higher capital utilization rates may raise user costs of capital because higher utilization rates may imply:

Accepted Answer

A) less highway congestion. 
B) off peak utility prices. 
C) operating when complementary services like transportation are unavailable or more expensive. 
D) all of the above. 
A) less highway congestion. 
B) off peak utility prices. 
C) operating when complementary services like transportation are unavailable or more expensive. 
D) all of the above.

Question 11

The Eurozone data from 2010 to 2015 shows that the job finding rate is:

Accepted Answer

A) acyclical. 
B) countercyclical. 
C) procyclical. 
D) exogenous. 
A) acyclical. 
B) countercyclical. 
C) procyclical. 
D) exogenous.

Question 12

If the labour force is 100 million, there are 95 million people employed, there are 98 million jobs that employers want occupied, then the unemployment rate is:

Accepted Answer

A) 3%. 
B) 5%. 
C) 5.3%. 
D) none of the above. 
A) 3%. 
B) 5%. 
C) 5.3%. 
D) none of the above.

Question 13

How does the capital utilization enter the production function?

Accepted Answer

The measure of capital, K, is multiplied

Question 14

An owner of capital might set their capital utilization rate below 100% because:

Accepted Answer

A) the depreciation rate goes up with the capital utilization rate. 
B) machines wear out faster when used more intensively. 
C) to make time available for maintaining their capital. 
D) all of the above. 
A) the depreciation rate goes up with the capital utilization rate. 
B) machines wear out faster when used more intensively. 
C) to make time available for maintaining their capital. 
D) all of the above.

Question 15

Unemployment will exist in a market clearing model, if it takes some search time for workers to find jobs.

Accepted Answer

A) True 
 B)False

Question 16

The duration of unemployment is the number unemployed divided by the labour force.

Accepted Answer

A) True 
 B)False

Question 17

The model predicts that with a negative shock to technology, the capital utilization rate,   , will:

Accepted Answer

A) rise as GDP rises. 
B) fall as GDP falls. 
C) rise as GDP falls. 
D) fall as GDP rises. 
A) rise as GDP rises. 
B) fall as GDP falls. 
C) rise as GDP falls. 
D) fall as GDP rises.

Question 18

In the model, the natural rate of unemployment is:

Accepted Answer

A) positively related to that job separations rate. 
B) zero. 
C) fixed. 
D) positively related to the job finding rate. 
A) positively related to that job separations rate. 
B) zero. 
C) fixed. 
D) positively related to the job finding rate.

Question 19

In the model of this chapter, the natural rate of unemployment is the unemployment rate:

Accepted Answer

A) where job findings equal job separations. 
B) job findings are maximized. 
C) the job separation rate equals the job finding rate. 
D) job separations are minimized. 
A) where job findings equal job separations. 
B) job findings are maximized. 
C) the job separation rate equals the job finding rate. 
D) job separations are minimized.

Question 20

If the labour force is 100 million, there are 94 million people employed, there are 99 million jobs that employers want occupied, then the vacancy rate is:

Accepted Answer

A) 5%. 
B) 5.1% 
C) 5.3% 
D) 1% 
A) 5%. 
B) 5.1% 
C) 5.3% 
D) 1%

When the capital utilization rate, , increases then:

The unemployment rate is:

The optimal capital utilization rate, , is that where:

In the model, the natural rate of unemployment is:

If the labour force is 100 million, there are 95 million people employed, there are 98 million jobs that employers want occupied, vacancy rate is:

Unemployment can exist in a market clearing model, if:

A worker will accept a job offer, if the real wage offer is above:

If the job separation rate is 0.02 and the job finding rate is 0.3, then the natural rate of unemployment is:

After the capital utilization rate, , is included in the model, the interest rate:

Higher capital utilization rates may raise user costs of capital because higher utilization rates may imply:

The Eurozone data from 2010 to 2015 shows that the job finding rate is:

If the labour force is 100 million, there are 95 million people employed, there are 98 million jobs that employers want occupied, then the unemployment rate is:

How does the capital utilization enter the production function?

An owner of capital might set their capital utilization rate below 100% because:

Unemployment will exist in a market clearing model, if it takes some search time for workers to find jobs.

The duration of unemployment is the number unemployed divided by the labour force.

The model predicts that with a negative shock to technology, the capital utilization rate, , will:

In the model, the natural rate of unemployment is:

In the model of this chapter, the natural rate of unemployment is the unemployment rate:

If the labour force is 100 million, there are 94 million people employed, there are 99 million jobs that employers want occupied, then the vacancy rate is:

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Introduction to Economic Growth

Working With the Solow Growth Model

Conditional Convergence and Long-Run Economic Growth

Macroeconomics Without Microeconomic Foundations

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Government Expenditure

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

World Markets in Goods and Credit

Exchange Rates

Filters

Exam 10: Capital Utilization and Unemployment

When the capital utilization rate, , increases then:

The unemployment rate is:

The optimal capital utilization rate, , is that where:

In the model, the natural rate of unemployment is:

If the labour force is 100 million, there are 95 million people employed, there are 98 million jobs that employers want occupied, vacancy rate is:

Unemployment can exist in a market clearing model, if:

A worker will accept a job offer, if the real wage offer is above:

If the job separation rate is 0.02 and the job finding rate is 0.3, then the natural rate of unemployment is:

After the capital utilization rate, , is included in the model, the interest rate:

Higher capital utilization rates may raise user costs of capital because higher utilization rates may imply:

The Eurozone data from 2010 to 2015 shows that the job finding rate is:

If the labour force is 100 million, there are 95 million people employed, there are 98 million jobs that employers want occupied, then the unemployment rate is:

How does the capital utilization enter the production function?

An owner of capital might set their capital utilization rate below 100% because:

Unemployment will exist in a market clearing model, if it takes some search time for workers to find jobs.

The duration of unemployment is the number unemployed divided by the labour force.

The model predicts that with a negative shock to technology, the capital utilization rate, , will:

In the model, the natural rate of unemployment is:

In the model of this chapter, the natural rate of unemployment is the unemployment rate:

If the labour force is 100 million, there are 94 million people employed, there are 99 million jobs that employers want occupied, then the vacancy rate is:

Thinking About Macroeconomics

National-Income Accounting: Gross Domestic Product and the Price Level

Introduction to Economic Growth

Working With the Solow Growth Model

Conditional Convergence and Long-Run Economic Growth

Macroeconomics Without Microeconomic Foundations

Markets, Prices, Supply, and Demand

Consumption, Saving, and Investment

An Equilibrium Business-Cycle Model

The Demand for Money and the Price Level

Inflation, Money Growth, and Interest Rates

Government Expenditure

Taxes

Public Debt

Money and Business Cycles I: the Price-Misperceptions Model

Money and Business Cycles Ii: Sticky Prices and Nominal Wage Rates

World Markets in Goods and Credit

Exchange Rates

Filters