Exam 13: The Labor Market in the Macroeconomy

Refer to the information provided in Figure 13.1 below to answer the questions that follow. Figure 13.1 -Refer to Figure 13.1. Which of the following can change the equilibrium wage rate from $9 to $15?

If unemployment is above the natural rate of unemployment, then output is above potential output.

If aggregate supply changes when aggregate demand is stable, then the Phillips curve is negatively sloped.

If the measured unemployment rate is 6% and the natural unemployment rate is 4%, then

The long-run Phillips curve corresponds to the natural rate of unemployment.

The Phillips curve depicts the relationship between

Employment tends to fall when

Refer to the information provided in Figure 13.6 below to answer the questions that follow. Figure 13.6 -Refer to Figure 13.6. Assuming all shocks to the economy arise from demand changes, which panel represents the short-run relationship between output and the price level?

The percentage of workers whose wages are set by explicit contracts falls. This should

Intel Corporation, a major manufacturer of microchips, saw the demand for its product drop by 25%. Even though the demand for its product decreased, Intel did not cut the wages of its nonunionized workers. This is an example of

There is no systematic relationship between the price level and the level of aggregate output when

At equilibrium in the labor market, prices and wages reflect a trade-off between the value households place on outputs and the value of time spent in leisure and nonmarket activities.

If wages are sticky, an increase in labor

If firms start offering more employment benefits, such as more stock options and a better dental plan, we would expect the labor ________ curve to shift to the ________.

According to ________ economists, the only types of unemployment that exist in an economy are structural and frictional unemployment.

If inflation expectations change as a result of an expansionary fiscal policy, this causes

A decline in the demand for labor means the unemployment rate must rise.

A firm may benefit by paying workers more than the market clearing wage because the higher wages may lead to all of the following except

13.2 The Classical View of the Labor Market -Changes in the ________ market affect the shape of the short run aggregate supply curve.

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