Question 1

GDP rises can rise in an expansion due to:

Accepted Answer

A) an increase in technology, A, directly increasing GDP. 
B) an increase in technology, A, causing an increase in labour, L and GDP. 
C) an increase in technology, A, causing an increase in the capital utilization rate, the quantity of capital services and GDP. 
D) all of the above. 
A) an increase in technology, A, directly increasing GDP. 
B) an increase in technology, A, causing an increase in labour, L and GDP. 
C) an increase in technology, A, causing an increase in the capital utilization rate, the quantity of capital services and GDP. 
D) all of the above.

Question 2

If the labour force is 100 million, there are 95 million people employed, there are 98 million jobs that employers want occupied, then the number of unemployed workers in the labour force is:

Accepted Answer

A) 5 million. 
B) 3 million. 
C) 2 million. 
D) none of the above. 
A) 5 million. 
B) 3 million. 
C) 2 million. 
D) none of the above.

Question 3

A decrease in workers' effective real incomes while unemployed,   , will:

Accepted Answer

A) lower the job finding rate and raise the expected duration of unemployment. 
B) lower the job finding rate and the expected duration of unemployment. 
C) raise the job finding rate and lower the expected duration of unemployment. 
D) raise the job finding rate and the expected duration of unemployment. 
A) lower the job finding rate and raise the expected duration of unemployment. 
B) lower the job finding rate and the expected duration of unemployment. 
C) raise the job finding rate and lower the expected duration of unemployment. 
D) raise the job finding rate and the expected duration of unemployment.

Question 4

the net real income from supplying capital services is:

Accepted Answer

A) (R/P)•   K -   (   )K. 
B) (R/P)•   K +   (   ). 
C)    (   )K - (R/P)•   
D) (R/P)•   K •   (   )K 
A) (R/P)•   K -   (   )K. 
B) (R/P)•   K +   (   ). 
C)    (   )K - (R/P)•   
D) (R/P)•   K •   (   )K

Question 5

The vacancy rate in the labour market is:

Accepted Answer

A) the number of job openings divided by the number of unemployed people in the labour force. 
B) the number of job openings divided by the number of workers in the labour force. 
C) the ratio of open jobs to filled jobs. 
D) the ratio of open jobs to the total number of jobs that employers want occupied. 
A) the number of job openings divided by the number of unemployed people in the labour force. 
B) the number of job openings divided by the number of workers in the labour force. 
C) the ratio of open jobs to filled jobs. 
D) the ratio of open jobs to the total number of jobs that employers want occupied.

Question 6

An increase in a worker's effective real income while unemployed,   , will cause the worker's:

Accepted Answer

A) real wage offers to increase. 
B) real wage offers to decrease. 
C) real reservation wage to increase. 
D) real reservation wage to decrease. 
A) real wage offers to increase. 
B) real wage offers to decrease. 
C) real reservation wage to increase. 
D) real reservation wage to decrease.

Question 7

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

Accepted Answer

A) operating at inconvenient times. 
B) paying overtime to employees operating the machines. 
C) operating when complementary services like transporters are unavailable or more expensive. 
D) all of the above. 
A) operating at inconvenient times. 
B) paying overtime to employees operating the machines. 
C) operating when complementary services like transporters are unavailable or more expensive. 
D) all of the above.

Question 8

Unemployment can exist in a market clearing model, if:

Accepted Answer

A) the labour market is in disequilibrium. 
B) we allow capital utilization of less than 100%. 
C) we allow for differences among workers and jobs. 
D) all of the above. 
A) the labour market is in disequilibrium. 
B) we allow capital utilization of less than 100%. 
C) we allow for differences among workers and jobs. 
D) all of the above.

Question 9

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

Accepted Answer

A) 5 million. 
B) 3 million. 
C) 2 million. 
D) none of the above. 
A) 5 million. 
B) 3 million. 
C) 2 million. 
D) none of the above.

Question 10

Job separations can be caused by:

Accepted Answer

A) an adverse shock to the firm's production function. 
B) foreign competition. 
C) increased technology, A. 
D) all of the above. 
A) an adverse shock to the firm's production function. 
B) foreign competition. 
C) increased technology, A. 
D) all of the above.

Question 11

A negative shock to productivity, A, will:

Accepted Answer

A) lower the job finding rate and raise the expected duration of unemployment. 
B) lower the job finding rate and the expected duration of unemployment. 
C) raise the job finding rate and lower the expected duration of unemployment. 
D) raise the job finding rate and the expected duration of unemployment. 
A) lower the job finding rate and raise the expected duration of unemployment. 
B) lower the job finding rate and the expected duration of unemployment. 
C) raise the job finding rate and lower the expected duration of unemployment. 
D) raise the job finding rate and the expected duration of unemployment.

Question 12

Unemployment can exist in a market clearing model, if:

Accepted Answer

A) there are frictions in the labour market. 
B) the labour supply curve is upward sloping. 
C) the labour market is in equilibrium. 
D) all of the above. 
A) there are frictions in the labour market. 
B) the labour supply curve is upward sloping. 
C) the labour market is in equilibrium. 
D) all of the above.

Question 13

Job separations can be due to:

Accepted Answer

A) a positive shock to the firm's production function. 
B) an increase in technology. 
C) a change in a worker's circumstances such as changing locations. 
D) all of the above. 
A) a positive shock to the firm's production function. 
B) an increase in technology. 
C) a change in a worker's circumstances such as changing locations. 
D) all of the above.

Question 14

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

Accepted Answer

A) less highway congestion. 
B) paying overtime to employees operating the machines. 
C) off peak utility prices. 
D) all of the above. 
A) less highway congestion. 
B) paying overtime to employees operating the machines. 
C) off peak utility prices. 
D) all of the above.

Question 15

When we allow a capital utilization rate,   , less than 100%, then the rate of return from owning capital becomes:

Accepted Answer

A) (R/P) -   . 
B) (R/P)•   -   (   ). 
C) (R/P)•   -   . 
D) (R/P) -   (   ). 
A) (R/P) -   . 
B) (R/P)•   -   (   ). 
C) (R/P)•   -   . 
D) (R/P) -   (   ).

Question 16

What is the reservation wage?

Accepted Answer

The reservation wage

Question 17

When the capital utilization rate,   , increases then:

Accepted Answer

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

Question 18

If the rental price of capital increases, then the capital utilization rate,   ,:

Accepted Answer

A) also increases. 
B) decreases. 
C) remains the same. 
D) depends on whether the substitution rate is greater than the income effect. 
A) also increases. 
B) decreases. 
C) remains the same. 
D) depends on whether the substitution rate is greater than the income effect.

Question 19

How can there be unemployment in a market clearing model?

Accepted Answer

There can be unemployment in a market cl

GDP rises can rise in an expansion due to:

If the labour force is 100 million, there are 95 million people employed, there are 98 million jobs that employers want occupied, then the number of unemployed workers in the labour force is:

A decrease in workers' effective real incomes while unemployed, , will:

the net real income from supplying capital services is:

The vacancy rate in the labour market is:

An increase in a worker's effective real income while unemployed, , will cause the worker's:

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

Unemployment can exist in a market clearing model, if:

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

Job separations can be caused by:

A negative shock to productivity, A, will:

Unemployment can exist in a market clearing model, if:

Job separations can be due to:

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

When we allow a capital utilization rate, , less than 100%, then the rate of return from owning capital becomes:

What is the reservation wage?

When the capital utilization rate, , increases then:

If the rental price of capital increases, then the capital utilization rate, ,:

How can there be unemployment in a market clearing model?

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

GDP rises can rise in an expansion due to:

If the labour force is 100 million, there are 95 million people employed, there are 98 million jobs that employers want occupied, then the number of unemployed workers in the labour force is:

A decrease in workers' effective real incomes while unemployed, , will:

the net real income from supplying capital services is:

The vacancy rate in the labour market is:

An increase in a worker's effective real income while unemployed, , will cause the worker's:

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

Unemployment can exist in a market clearing model, if:

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

Job separations can be caused by:

A negative shock to productivity, A, will:

Unemployment can exist in a market clearing model, if:

Job separations can be due to:

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

When we allow a capital utilization rate, , less than 100%, then the rate of return from owning capital becomes:

What is the reservation wage?

When the capital utilization rate, , increases then:

If the rental price of capital increases, then the capital utilization rate, ,:

How can there be unemployment in a market clearing model?

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