Question 1

The supply of labor curve slopes upward because,with a higher wage,the opportunity cost of leisure rises.

Accepted Answer

A) True 
 B)False  True

Question 2

Frictional unemployment is the unemployment that results from:

Accepted Answer

A) workers losing jobs during recession. 
B) workers losing their jobs during seasonal changes. 
C) workers changing jobs in a dynamic economy. 
D) prevailing labor market institutions. 
E) workers leaving the labor force. 
A) workers losing jobs during recession. 
B) workers losing their jobs during seasonal changes. 
C) workers changing jobs in a dynamic economy. 
D) prevailing labor market institutions. 
E) workers leaving the labor force. C

Question 3

The rise in the employment-population ratio largely is due to:

Accepted Answer

A) a shrinking U.S.population. 
B) more teenagers entering the labor force. 
C) more women entering the labor force. 
D) an increase in immigrant workers. 
E) It is unexplained. 
A) a shrinking U.S.population. 
B) more teenagers entering the labor force. 
C) more women entering the labor force. 
D) an increase in immigrant workers. 
E) It is unexplained. C

Question 4

-Using Figure 7.1,which depicts the U.S.unemployment rate,identify the year(s)of the peak of the boom.

Accepted Answer

A) 1983 
B) 1989 
C) 2001 
D) all of the above 
E) none of the above 
A) 1983 
B) 1989 
C) 2001 
D) all of the above 
E) none of the above

Question 5

Unemployment benefits in the United States are extended generally about __________,while in Europe they average __________.

Accepted Answer

A) six months;one year 
B) six months;five years 
C) three months;two years 
D) six weeks;six months 
E) five years;six months 
A) six months;one year 
B) six months;five years 
C) three months;two years 
D) six weeks;six months 
E) five years;six months

Question 6

The natural rate of unemployment is equal to frictional plus structural unemployment.

Accepted Answer

A) True 
 B)False

Question 7

The equation means you:

Accepted Answer

A) would prefer to receive $386 today than $1,000 in 10 years. 
B) are indifferent between receiving $386 today and $1,000 in 10 years. 
C) would prefer to receive $1,000 in 10 years than $386 today. 
D) are indifferent between receiving $386 today and $1,000 in 100 years. 
E) do not have enough information. 
A) would prefer to receive $386 today than $1,000 in 10 years. 
B) are indifferent between receiving $386 today and $1,000 in 10 years. 
C) would prefer to receive $1,000 in 10 years than $386 today. 
D) are indifferent between receiving $386 today and $1,000 in 100 years. 
E) do not have enough information.

Question 8

-Consider Figure 7.4.Given what we know about the number of hours worked by college graduates and the wage premium received by college graduates,which equilibrium in the figure characterizes these empirical observations,on average?

Accepted Answer

A) the intersection of   and
  
B) the intersection of   and
  
C) the intersection of   and
  
D) the intersection of   and
  
E) none of the above 
A) the intersection of   and
  
B) the intersection of   and
  
C) the intersection of   and
  
D) the intersection of   and
  
E) none of the above

Question 9

You are a senior graduating soon.In 2010 the average annual wage was about $62,000.Suppose you graduate when you are 22 and will retire when you are 67 (normal in the United States,about 45 years of work).Assuming your wages don't grow over time,ignoring inflation,and assuming we discount the future at 4.5 percent,what would be present value of your human capital? If we discount the future at 3 percent what would be your present value lifetime income? Intuitively explain the difference.

Accepted Answer

We use the equation in Section

Question 10

The natural rate of unemployment is equal to frictional plus cyclical unemployment.

Accepted Answer

A) True 
 B)False

Question 11

The "natural rate of unemployment" is the unemployment rate that would prevail:

Accepted Answer

A) during changes in the business cycle. 
B) if the economy were in neither a boom nor a recession. 
C) if people voluntarily leave work. 
D) during seasonal changes in the economy. 
E) if the unemployment rate were zero. 
A) during changes in the business cycle. 
B) if the economy were in neither a boom nor a recession. 
C) if people voluntarily leave work. 
D) during seasonal changes in the economy. 
E) if the unemployment rate were zero.

Question 12

-Consider the labor market depicted in Figure 7.3.Wage w¯ is called __________ and __________.

Accepted Answer

A) wage rigidity;reduces unemployment 
B) wage rigidity;decreases labor market volatility 
C) a flexible wage;increases labor market volatility 
D) wage rigidity;increases labor market volatility 
E) the market wage;increases unemployment 
A) wage rigidity;reduces unemployment 
B) wage rigidity;decreases labor market volatility 
C) a flexible wage;increases labor market volatility 
D) wage rigidity;increases labor market volatility 
E) the market wage;increases unemployment

Question 13

-Consider Figure 7.4.If the demand curve for college graduates is characterized by  
,which of the following describes why the demand for labor for college graduates is higher than that for high school students,characterized by  
?

Accepted Answer

A) There is a growing number of college graduates. 
B) There are fewer college graduates than high school graduates. 
C) College graduates have a higher marginal product. 
D) College graduates are smarter than high school graduates. 
E) None of the above is correct. 
A) There is a growing number of college graduates. 
B) There are fewer college graduates than high school graduates. 
C) College graduates have a higher marginal product. 
D) College graduates are smarter than high school graduates. 
E) None of the above is correct.

Question 14

-Consider Figure 7.4.Given what we know about the difference between college- and high school-educated workers,which equilibrium characterizes the high school graduate experience,on average?

Accepted Answer

A) the intersection of   and
  
B) the intersection of   and
  
C) the intersection of   and
  
D) the intersection of   and
  
E) none of the above 
A) the intersection of   and
  
B) the intersection of   and
  
C) the intersection of   and
  
D) the intersection of   and
  
E) none of the above

Question 15

Consider the simplified payment system for the victims of 9/11:
• The family of a 65-year-old service worker earning $10,000 a year receives $300,000 in compensation.
• The family of a 30-year-old bond trader earning $175,000 a year receives $4.35 million.
Which statement best describes the difference in the payments between the service worker and the bond trader?

Accepted Answer

A) The present value of the bond trader's lifetime income is greater than the service worker's. 
B) Because of her age,the bond trader had less savings to rely on so her family received more compensation. 
C) The future value of the bond trader's lifetime income is less than the service worker's. 
D) Such a discrepancy in compensation would never be the case. 
E) None of the above is correct. 
A) The present value of the bond trader's lifetime income is greater than the service worker's. 
B) Because of her age,the bond trader had less savings to rely on so her family received more compensation. 
C) The future value of the bond trader's lifetime income is less than the service worker's. 
D) Such a discrepancy in compensation would never be the case. 
E) None of the above is correct.

Question 16

-Consider Table 7.1.In January 2007,the unemployment rate was:

Accepted Answer

A) about 4.8 percent. 
B) about 4.6 percent. 
C) about 33.8 percent. 
D) about 3.0 percent. 
E) about 9.0 percent. 
A) about 4.8 percent. 
B) about 4.6 percent. 
C) about 33.8 percent. 
D) about 3.0 percent. 
E) about 9.0 percent.

Question 17

__________ historically has had the lowest unemployment rate since 1960.

Accepted Answer

A) The United States 
B) Japan 
C) France 
D) The United Kingdom 
E) Germany 
A) The United States 
B) Japan 
C) France 
D) The United Kingdom 
E) Germany

Question 18

The explanation for the upward sloping supply of labor curve is that:

Accepted Answer

A) the marginal product of capital is positive. 
B) as the wage rises the opportunity cost of leisure rises,so people work more. 
C) as the wage rises,people want to work less. 
D) the marginal product of labor is diminishing. 
E) None of the above is correct. 
A) the marginal product of capital is positive. 
B) as the wage rises the opportunity cost of leisure rises,so people work more. 
C) as the wage rises,people want to work less. 
D) the marginal product of labor is diminishing. 
E) None of the above is correct.

Question 19

Over the past 50 years or so,

Accepted Answer

A) the male employment-population ratio always has been rising. 
B) the female employment-population ratio generally has been falling. 
C) the male employment-population ratio generally has been rising. 
D) the female employment-population ratio generally has been rising. 
E) None of the above is correct. 
A) the male employment-population ratio always has been rising. 
B) the female employment-population ratio generally has been falling. 
C) the male employment-population ratio generally has been rising. 
D) the female employment-population ratio generally has been rising. 
E) None of the above is correct.

Question 20

A key reason that unemployment in the United States is so low compared to most of Europe is because of:

Accepted Answer

A) no cyclical unemployment. 
B) low frictional unemployment. 
C) high structural unemployment. 
D) low structural unemployment. 
E) no structural unemployment. 
A) no cyclical unemployment. 
B) low frictional unemployment. 
C) high structural unemployment. 
D) low structural unemployment. 
E) no structural unemployment.

The supply of labor curve slopes upward because,with a higher wage,the opportunity cost of leisure rises.

Frictional unemployment is the unemployment that results from:

The rise in the employment-population ratio largely is due to:

-Using Figure 7.1,which depicts the U.S.unemployment rate,identify the year(s)of the peak of the boom.

Unemployment benefits in the United States are extended generally about ,while in Europe they average .

The natural rate of unemployment is equal to frictional plus structural unemployment.

The equation means you:

-Consider Figure 7.4.Given what we know about the number of hours worked by college graduates and the wage premium received by college graduates,which equilibrium in the figure characterizes these empirical observations,on average?

The natural rate of unemployment is equal to frictional plus cyclical unemployment.

The "natural rate of unemployment" is the unemployment rate that would prevail:

-Consider the labor market depicted in Figure 7.3.Wage w¯ is called and .

-Consider Figure 7.4.If the demand curve for college graduates is characterized by ,which of the following describes why the demand for labor for college graduates is higher than that for high school students,characterized by ?

-Consider Figure 7.4.Given what we know about the difference between college- and high school-educated workers,which equilibrium characterizes the high school graduate experience,on average?

-Consider Table 7.1.In January 2007,the unemployment rate was:

__________ historically has had the lowest unemployment rate since 1960.

The explanation for the upward sloping supply of labor curve is that:

Over the past 50 years or so,

A key reason that unemployment in the United States is so low compared to most of Europe is because of:

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long- Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Exam 7: The Labor Market,wages,and Unemployment

The supply of labor curve slopes upward because,with a higher wage,the opportunity cost of leisure rises.

Frictional unemployment is the unemployment that results from:

The rise in the employment-population ratio largely is due to:

-Using Figure 7.1,which depicts the U.S.unemployment rate,identify the year(s)of the peak of the boom.

Unemployment benefits in the United States are extended generally about __________,while in Europe they average __________.

The natural rate of unemployment is equal to frictional plus structural unemployment.

The equation means you:

-Consider Figure 7.4.Given what we know about the number of hours worked by college graduates and the wage premium received by college graduates,which equilibrium in the figure characterizes these empirical observations,on average?

The natural rate of unemployment is equal to frictional plus cyclical unemployment.

The "natural rate of unemployment" is the unemployment rate that would prevail:

-Consider the labor market depicted in Figure 7.3.Wage w¯ is called __________ and __________.

-Consider Figure 7.4.If the demand curve for college graduates is characterized by ,which of the following describes why the demand for labor for college graduates is higher than that for high school students,characterized by ?

-Consider Figure 7.4.Given what we know about the difference between college- and high school-educated workers,which equilibrium characterizes the high school graduate experience,on average?

-Consider Table 7.1.In January 2007,the unemployment rate was:

__________ historically has had the lowest unemployment rate since 1960.

The explanation for the upward sloping supply of labor curve is that:

Over the past 50 years or so,

A key reason that unemployment in the United States is so low compared to most of Europe is because of:

Introduction to Macroeconomics

Measuring the Macroeconomy

An Overview of Long- Run Economic Growth

A Model of Production

The Solow Growth Model

Growth and Ideas

Inflation

An Introduction to the Short Run

The Great Recession: a First Look

The Is Curve

Monetary Policy and the Phillips Curve

Stabilization Policy and the Asad Framework

The Great Recession and the Short-Run Model

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Unemployment benefits in the United States are extended generally about ,while in Europe they average .

-Consider the labor market depicted in Figure 7.3.Wage w¯ is called and .