Exam 14: The Labor Market in the Macroeconomy

Suppose that airline workers are laid off during a recession because of an unspoken agreement between airline workers and airline executives that wages will not be reduced.This example is consistent with the

In the long run,the Phillips curve will be vertical at the natural rate of unemployment if

According to classical economists,the only types of unemployment that exist in an economy are

The classical view of the labor market holds that unemployment in the economy consists of frictional and structural unemployment.

Structural unemployment arises when the economy changes making some jobs obsolete.

Refer to the information provided in Figure 14.2 below to answer the questions that follow. Figure 14.2 -Refer to Figure 14.2.At wage rate $15,there is a ________ of labor equal to ________ million people.

Which of the following arguments is NOT offered to explain the existence of "sticky" wages?

Refer to the information provided in Figure 14.7 below to answer the questions that follow. Figure 14.7 -Refer to Figure 14.7.Which combinations of events could move the economy from Point A to Point B,and then from Point B to Point E?

If the minimum wage is set above the market clearing wage,wages will be "sticky" in the downward direction.

Refer to the information provided in Figure 14.6 below to answer the questions that follow. Figure 14.6 -Refer to Figure 14.6.If unemployment is on the x-axis,which panel represents the long-run Phillips curve?

If wages are sticky,an increase in labor

The unemployment rate is the fraction of the labor force without a job.

Cyclical unemployment is that which rises in recessions and shrinks during expansions.

The minimum wage law contributes to a

If a person is not employed but is looking for work,she is in the labor force.

Refer to the information provided in Figure 14.7 below to answer the questions that follow. Figure 14.7 -Refer to Figure 14.7.Which combinations of events could move the economy from Point A to Point C,and then from Point C to Point D?

Which of the following may shift the labor supply curve?

Efficiency wage theory suggests that firms may hold wages above the market clearing rate because

Refer to the information provided in Figure 14.4 below to answer the questions that follow. Figure 14.4 -Refer to Figure 14.4.A firm might pay wages above $10 per hour if it believes such a wage will result in all of the following EXCEPT

Sticky wages reduce unemployment.