Question 1

In the DMP model,the size of the labour force is positively related to

Accepted Answer

A)  the expected payoff to searching for work. 
B)  the population growth rate. 
C)  the ratio of males to females in the labour force. 
D)  the expected cost to searching for work. 
E)  the benefits of non-participation. 
A)  the expected payoff to searching for work. 
B)  the population growth rate. 
C)  the ratio of males to females in the labour force. 
D)  the expected cost to searching for work. 
E)  the benefits of non-participation. A

Question 2

According to the DMP model,in equilibrium labour market tightness tends to be high when

Accepted Answer

A)  the cost of a vacancy is high relative to the firm's share of the surplus. 
B)  employment insurance benefits are high relative to the productivity of a match. 
C)  profits are close to zero. 
D)  the firm's share of the surplus is high relative to the cost of a vacancy. 
E)  the firm's share of the surplus is increasing in market tightness. 
A)  the cost of a vacancy is high relative to the firm's share of the surplus. 
B)  employment insurance benefits are high relative to the productivity of a match. 
C)  profits are close to zero. 
D)  the firm's share of the surplus is high relative to the cost of a vacancy. 
E)  the firm's share of the surplus is increasing in market tightness. D

Question 3

Government intervention influences the unemployment rate through

Accepted Answer

A)  its monetary policies. 
B)  its tax policies. 
C)  its regulations. 
D)  employment insurance. 
E)  its stabilization policies. 
A)  its monetary policies. 
B)  its tax policies. 
C)  its regulations. 
D)  employment insurance. 
E)  its stabilization policies. D

Question 4

The probability of finding a job is

Accepted Answer

A)  decreasing in the efficiency of the matching function. 
B)  increasing in market tightness. 
C)  increasing in the ratio of consumers searching to firms. 
D)  decreasing in market tightness. 
E)  constant across all levels of market tightness. 
A)  decreasing in the efficiency of the matching function. 
B)  increasing in market tightness. 
C)  increasing in the ratio of consumers searching to firms. 
D)  decreasing in market tightness. 
E)  constant across all levels of market tightness.

Question 5

The DMP model is consistent with which of the following business cycle facts?

Accepted Answer

A)  The unemployment rate is procyclical and the vacancy rate is procyclical. 
B)  The unemployment rate is countercyclical and the vacancy rate is acyclical. 
C)  The unemployment rate is countercyclical and the vacancy rate is countercyclical. 
D)  The unemployment rate is countercyclical and the vacancy rate is procyclical. 
E)  The unemployment rate is acyclical and the vacancy rate is procyclical. 
A)  The unemployment rate is procyclical and the vacancy rate is procyclical. 
B)  The unemployment rate is countercyclical and the vacancy rate is acyclical. 
C)  The unemployment rate is countercyclical and the vacancy rate is countercyclical. 
D)  The unemployment rate is countercyclical and the vacancy rate is procyclical. 
E)  The unemployment rate is acyclical and the vacancy rate is procyclical.

Question 6

In order for the Keynesian DMP model to be consistent with Keynesian ideas,the high wage equilibrium needs to have

Accepted Answer

A)  high unemployment and low output. 
B)  low unemployment and high vacancies. 
C)  high unemployment and high output. 
D)  low unemployment and high output. 
E)  low vacancies and high output. 
A)  high unemployment and low output. 
B)  low unemployment and high vacancies. 
C)  high unemployment and high output. 
D)  low unemployment and high output. 
E)  low vacancies and high output.

Question 7

Which of the following best describes mismatch that can increase the unemployment rate?

Accepted Answer

A)  a decrease in the availability of information for firms about the skills of workers 
B)  firms move production to Mexico 
C)  an increase in the availability of information for firms about the skills of workers 
D)  an overall decrease in the available skills of the labour force 
E)  production moves from Mexico to Canada 
A)  a decrease in the availability of information for firms about the skills of workers 
B)  firms move production to Mexico 
C)  an increase in the availability of information for firms about the skills of workers 
D)  an overall decrease in the available skills of the labour force 
E)  production moves from Mexico to Canada

Question 8

In the DMP model,an increase in Employment Insurance benefits makes labour search

Accepted Answer

A)  more attractive. 
B)  equivalent to working. 
C)  more difficult to monitor. 
D)  unambiguously decrease. 
E)  unambiguously increase. 
A)  more attractive. 
B)  equivalent to working. 
C)  more difficult to monitor. 
D)  unambiguously decrease. 
E)  unambiguously increase.

Question 9

Labour market tightness is defined by

Accepted Answer

A)  the number of firms divided by the number of consumers searching for work. 
B)  the number of firms multiplied by the number of consumers searching for work. 
C)  the number of consumers searching for work divided by the number of firms. 
D)  the number of employed consumers divided by the number of firms. 
E)  the number of firms divided by the number of employed consumers. 
A)  the number of firms divided by the number of consumers searching for work. 
B)  the number of firms multiplied by the number of consumers searching for work. 
C)  the number of consumers searching for work divided by the number of firms. 
D)  the number of employed consumers divided by the number of firms. 
E)  the number of firms divided by the number of employed consumers.

Question 10

In equilibrium in the DMP model,aggregate output is given by

Accepted Answer

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

Question 11

Changes in matching efficiency are particulariliy important for Canada because of

Accepted Answer

A)  the relatively low skill levels on average. 
B)  the stability of energy prices. 
C)  its proximity to the U.S. 
D)  the important role the government plays in the economy. 
E)  the important role the energy sector plays. 
A)  the relatively low skill levels on average. 
B)  the stability of energy prices. 
C)  its proximity to the U.S. 
D)  the important role the government plays in the economy. 
E)  the important role the energy sector plays.

Question 12

In the DMP model,firms continue posting vacancies until the probability of matching with a worker is equal to

Accepted Answer

A)  the ratio of the cost of posting a vacancy to the profits from a match. 
B)  the marginal product of labour. 
C)  the real wage rate. 
D)  the ratio of the profits from a match to the number of matches. 
E)  the unemployment rate. 
A)  the ratio of the cost of posting a vacancy to the profits from a match. 
B)  the marginal product of labour. 
C)  the real wage rate. 
D)  the ratio of the profits from a match to the number of matches. 
E)  the unemployment rate.

Question 13

According to Shavell and Weiss,the optimal Employment Insurance program would be one where

Accepted Answer

A)  the number of Employment Insurance recipients is restricted. 
B)  each province is only allowed so many workers on Employment Insurance at one time. 
C)  Employment Insurance benefits decrease over time. 
D)  Employment Insurance benefits increase over time. 
E)  Employment Insurance benefits in a specific region should be linked to the amount of federal government transfers they receive. 
A)  the number of Employment Insurance recipients is restricted. 
B)  each province is only allowed so many workers on Employment Insurance at one time. 
C)  Employment Insurance benefits decrease over time. 
D)  Employment Insurance benefits increase over time. 
E)  Employment Insurance benefits in a specific region should be linked to the amount of federal government transfers they receive.

Question 14

The peak in Canada's unemployment history occurred in

Accepted Answer

A)  1960-1961. 
B)  1973-1975. 
C)  1950-1951. 
D)  1984-1985. 
E)  2000-2002. 
A)  1960-1961. 
B)  1973-1975. 
C)  1950-1951. 
D)  1984-1985. 
E)  2000-2002.

Question 15

The Beveridge Curve is the

Accepted Answer

A)  negative relationship between the unemployment and vacancy rate. 
B)  negative relationship between the emploment and labour force participation rate. 
C)  positive relationship between the unemployment and vacancy rate. 
D)  negative relationship between the employment and vacancy rate. 
E)  positive relationship between unemployment and the labour force participation rate. 
A)  negative relationship between the unemployment and vacancy rate. 
B)  negative relationship between the emploment and labour force participation rate. 
C)  positive relationship between the unemployment and vacancy rate. 
D)  negative relationship between the employment and vacancy rate. 
E)  positive relationship between unemployment and the labour force participation rate.

Question 16

Which of the following statements is the most accurate about the behaviour of the unemployment rate in Canada over the last half of the 20th century?

Accepted Answer

A)  Both the cyclical behaviour of the unemployment rate and the trend behaviour of the unemployment rate are well explained by changes in the level of aggregate economic activity. 
B)  The cyclical behaviour of the unemployment rate is well explained by changes in the level of aggregate economic activity, and the trend behavior of the unemployment rate is well explained by demographic factors. 
C)  the cyclical behaviour of the unemployment rate is well explained by demographic factors, and the trend behaviour of the unemployment rate is well explained by changes in the level of aggregate economic activity. 
D)  Both the cyclical behaviour of the unemployment rate and the trend behaviour of the unemployment rate are well explained by demographic factors. 
E)  Both the cyclical behaviour of the unemployment rate and the trend behaviour of the unemployment rate are not well explained by demographic factors. 
A)  Both the cyclical behaviour of the unemployment rate and the trend behaviour of the unemployment rate are well explained by changes in the level of aggregate economic activity. 
B)  The cyclical behaviour of the unemployment rate is well explained by changes in the level of aggregate economic activity, and the trend behavior of the unemployment rate is well explained by demographic factors. 
C)  the cyclical behaviour of the unemployment rate is well explained by demographic factors, and the trend behaviour of the unemployment rate is well explained by changes in the level of aggregate economic activity. 
D)  Both the cyclical behaviour of the unemployment rate and the trend behaviour of the unemployment rate are well explained by demographic factors. 
E)  Both the cyclical behaviour of the unemployment rate and the trend behaviour of the unemployment rate are not well explained by demographic factors.

Question 17

The participation rate is defined as

Accepted Answer

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

Question 18

Government-sponsored Employment Insurance programs typically

Accepted Answer

A)  reduce the unemployment rate because they boost worker morale. 
B)  reduce the unemployment rate because they increase the net marginal product of labour. 
C)  increase the unemployment rate by increasing the number of spells of unemployment. 
D)  increase the unemployment rate by increasing the average duration of unemployment. 
E)  increase the unemployment rate by increasing the net marginal product of labour. 
A)  reduce the unemployment rate because they boost worker morale. 
B)  reduce the unemployment rate because they increase the net marginal product of labour. 
C)  increase the unemployment rate by increasing the number of spells of unemployment. 
D)  increase the unemployment rate by increasing the average duration of unemployment. 
E)  increase the unemployment rate by increasing the net marginal product of labour.

Question 19

Relative to the United States,labour markets in European countries tend to be characterized by

Accepted Answer

A)  fewer restrictions on hiring and firing. 
B)  lower taxes. 
C)  lower minimum wages. 
D)  more generous unemployment benefits. 
E)  less labour market rigidities. 
A)  fewer restrictions on hiring and firing. 
B)  lower taxes. 
C)  lower minimum wages. 
D)  more generous unemployment benefits. 
E)  less labour market rigidities.

Question 20

In equilibrium,an increase in Employment Insurance benefits

Accepted Answer

A)  increases the unemployment rate and decreases the vacancy rate. 
B)  increases the unemployment rate and increases the vacancy rate. 
C)  decreases the unemployment rate and decreases the vacancy rate. 
D)  decreases the unemployment rate and increases the vacancy rate. 
E)  increases the unemployment rate, but does not affect the vacancy rate. 
A)  increases the unemployment rate and decreases the vacancy rate. 
B)  increases the unemployment rate and increases the vacancy rate. 
C)  decreases the unemployment rate and decreases the vacancy rate. 
D)  decreases the unemployment rate and increases the vacancy rate. 
E)  increases the unemployment rate, but does not affect the vacancy rate.

In the DMP model,the size of the labour force is positively related to

According to the DMP model,in equilibrium labour market tightness tends to be high when

Government intervention influences the unemployment rate through

The probability of finding a job is

The DMP model is consistent with which of the following business cycle facts?

In order for the Keynesian DMP model to be consistent with Keynesian ideas,the high wage equilibrium needs to have

Which of the following best describes mismatch that can increase the unemployment rate?

In the DMP model,an increase in Employment Insurance benefits makes labour search

Labour market tightness is defined by

In equilibrium in the DMP model,aggregate output is given by

Changes in matching efficiency are particulariliy important for Canada because of

In the DMP model,firms continue posting vacancies until the probability of matching with a worker is equal to

According to Shavell and Weiss,the optimal Employment Insurance program would be one where

The peak in Canada's unemployment history occurred in

The Beveridge Curve is the

Which of the following statements is the most accurate about the behaviour of the unemployment rate in Canada over the last half of the 20th century?

The participation rate is defined as

Government-sponsored Employment Insurance programs typically

Relative to the United States,labour markets in European countries tend to be characterized by

In equilibrium,an increase in Employment Insurance benefits

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters

Exam 6: Search and Unemployment

In the DMP model,the size of the labour force is positively related to

According to the DMP model,in equilibrium labour market tightness tends to be high when

Government intervention influences the unemployment rate through

The probability of finding a job is

The DMP model is consistent with which of the following business cycle facts?

In order for the Keynesian DMP model to be consistent with Keynesian ideas,the high wage equilibrium needs to have

Which of the following best describes mismatch that can increase the unemployment rate?

In the DMP model,an increase in Employment Insurance benefits makes labour search

Labour market tightness is defined by

In equilibrium in the DMP model,aggregate output is given by

Changes in matching efficiency are particulariliy important for Canada because of

In the DMP model,firms continue posting vacancies until the probability of matching with a worker is equal to

According to Shavell and Weiss,the optimal Employment Insurance program would be one where

The peak in Canada's unemployment history occurred in

The Beveridge Curve is the

Which of the following statements is the most accurate about the behaviour of the unemployment rate in Canada over the last half of the 20th century?

The participation rate is defined as

Government-sponsored Employment Insurance programs typically

Relative to the United States,labour markets in European countries tend to be characterized by

In equilibrium,an increase in Employment Insurance benefits

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: The Work–Leisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: The Consumption–Savings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model with Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models with Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: A Deeper Look

Filters