Question 1

Social contracts are ________ agreements between workers and firms that firms will not cut wages.

Accepted Answer

A)  formal 
B)  written 
C)  unspoken 
D)  union 
A)  formal 
B)  written 
C)  unspoken 
D)  union

Question 2

Refer to the information provided in Figure 13.3 below to answer the questions that follow.   Figure 13.3
-Refer to Figure 13.3. A minimum wage of $10

Accepted Answer

A)  will lead to unemployment of 20. 
B)  will lead to unemployment of 40. 
C)  will lead to unemployment of 60. 
D)  will have no effect because the minimum wage is set at the equilibrium wage and for a minimum wage to have any effect on the labor market it must be below the equilibrium wage. 
A)  will lead to unemployment of 20. 
B)  will lead to unemployment of 40. 
C)  will lead to unemployment of 60. 
D)  will have no effect because the minimum wage is set at the equilibrium wage and for a minimum wage to have any effect on the labor market it must be below the equilibrium wage.

Question 3

If the ________ curve shifts from year to year and the ________ curve does not, then the Phillips curve would show a positive relationship between inflation and unemployment rates.

Accepted Answer

A)  aggregate demand; aggregate supply 
B)  aggregate supply; aggregate demand 
C)  employment; inflation 
D)  inflation; employment 
A)  aggregate demand; aggregate supply 
B)  aggregate supply; aggregate demand 
C)  employment; inflation 
D)  inflation; employment

Question 4

If you hear a person saying "I lost my job at a call center because my employer has outsourced all customer service to India," you should conclude that this person is ________ unemployed.

Accepted Answer

A)  cyclically 
B)  structurally 
C)  frictionally 
D)  seasonally 
A)  cyclically 
B)  structurally 
C)  frictionally 
D)  seasonally

Question 5

Only when the unemployment rate is equal to the nonaccelerating inflation rate of unemployment (NAIRU) is the price level changing at a constant rate.

Accepted Answer

A) True 
 B)False

Question 6

An increase in inflationary expectations shifts the economy's short run Phillips curve to the left.

Accepted Answer

A) True 
 B)False

Question 7

implicit contracts are employment contracts that stipulate workers' wages for a specific period of time, usually 1 to 3 years.

Accepted Answer

A) True 
 B)False

Question 8

Minimum wage laws contribute to a higher unemployment rate by

Accepted Answer

A)  raising wages above the market clearing level in some labor markets. 
B)  pushing wages below the market clearing level in some labor markets. 
C)  raising wages above the market clearing level in all labor markets. 
D)  pushing wages below the market clearing level in all labor markets. 
A)  raising wages above the market clearing level in some labor markets. 
B)  pushing wages below the market clearing level in some labor markets. 
C)  raising wages above the market clearing level in all labor markets. 
D)  pushing wages below the market clearing level in all labor markets.

Question 9

The unemployment rate will never be zero because the economy is dynamic and always changing.

Accepted Answer

A) True 
 B)False

Question 10

Refer to the information provided in Figure 13.7 below to answer the questions that follow.   Figure 13.7
-Refer to Figure 13.7. If the economy is on SRPC3, then the expected inflation rate is

Accepted Answer

A)  4%. 
B)  5%. 
C)  6%. 
D)  none of the above 
A)  4%. 
B)  5%. 
C)  6%. 
D)  none of the above

Question 11

Minimum wage laws contribute to a ________ unemployment rate by raising wages above the market clearing level in some labor markets.

Accepted Answer

A)  higher 
B)  lower 
C)  market equilibrium 
D)  natural 
A)  higher 
B)  lower 
C)  market equilibrium 
D)  natural

Question 12

Efficiency wages are an explanation for the existence of unemployment.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following may shift the labor supply curve?

Accepted Answer

A)  an increase in worker productivity 
B)  a decrease in the value people place on their time 
C)  an increase in the price of the output of the firm 
D)  an increase in the corporate tax rate 
A)  an increase in worker productivity 
B)  a decrease in the value people place on their time 
C)  an increase in the price of the output of the firm 
D)  an increase in the corporate tax rate

Question 14

Refer to the information provided in Figure 13.7 below to answer the questions that follow.   Figure 13.7
-Refer to Figure 13.7. If the economy is at Point B, the cost of raw material decreased dramatically, and the aggregate demand did not change, the economy could move to Point

Accepted Answer

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

Question 15

Minimum wage is an example of a price ________, and results in a ________ of labor.

Accepted Answer

A)  floor; surplus 
B)  ceiling; surplus 
C)  floor; shortage 
D)  ceiling; shortage 
A)  floor; surplus 
B)  ceiling; surplus 
C)  floor; shortage 
D)  ceiling; shortage

Question 16

The Phillips curve suggests that if we want to lower the unemployment rate, we must accept a lower inflation rate in return.

Accepted Answer

A) True 
 B)False

Question 17

If a country has a population of 400 million, 160 million people employed and 40 million people looking for work, then its unemployment rate is

Accepted Answer

A)  10%. 
B)  20%. 
C)  25%. 
D)  40%. 
A)  10%. 
B)  20%. 
C)  25%. 
D)  40%.

Question 18

If you hear a person saying "I just relocated to this city after graduating from college and have yet to find an acceptable job in my field," you should conclude that this person is ________ unemployed.

Accepted Answer

A)  cyclically 
B)  structurally 
C)  frictionally 
D)  seasonally 
A)  cyclically 
B)  structurally 
C)  frictionally 
D)  seasonally

Question 19

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

Accepted Answer

A) True 
 B)False

Question 20

If aggregate demand decreases and expectations regarding inflation remain constant

Accepted Answer

A)  the economy moves along the short-run Phillips curve. 
B)  the short-run Phillips curve shifts to the right. 
C)  the short-run Phillips curve shifts to the left. 
D)  the long-run Phillips curve shifts to the right. 
A)  the economy moves along the short-run Phillips curve. 
B)  the short-run Phillips curve shifts to the right. 
C)  the short-run Phillips curve shifts to the left. 
D)  the long-run Phillips curve shifts to the right.

Exam 13: The Labor Market in the Macroeconomy

Social contracts are ________ agreements between workers and firms that firms will not cut wages.

Refer to the information provided in Figure 13.3 below to answer the questions that follow. Figure 13.3 -Refer to Figure 13.3. A minimum wage of $10

If the ________ curve shifts from year to year and the ________ curve does not, then the Phillips curve would show a positive relationship between inflation and unemployment rates.

If you hear a person saying "I lost my job at a call center because my employer has outsourced all customer service to India," you should conclude that this person is ________ unemployed.

Only when the unemployment rate is equal to the nonaccelerating inflation rate of unemployment (NAIRU) is the price level changing at a constant rate.

An increase in inflationary expectations shifts the economy's short run Phillips curve to the left.

implicit contracts are employment contracts that stipulate workers' wages for a specific period of time, usually 1 to 3 years.

Minimum wage laws contribute to a higher unemployment rate by

The unemployment rate will never be zero because the economy is dynamic and always changing.

Refer to the information provided in Figure 13.7 below to answer the questions that follow. Figure 13.7 -Refer to Figure 13.7. If the economy is on SRPC3, then the expected inflation rate is

Minimum wage laws contribute to a ________ unemployment rate by raising wages above the market clearing level in some labor markets.

Efficiency wages are an explanation for the existence of unemployment.

Which of the following may shift the labor supply curve?

Refer to the information provided in Figure 13.7 below to answer the questions that follow. Figure 13.7 -Refer to Figure 13.7. If the economy is at Point B, the cost of raw material decreased dramatically, and the aggregate demand did not change, the economy could move to Point

Minimum wage is an example of a price ________, and results in a ________ of labor.

The Phillips curve suggests that if we want to lower the unemployment rate, we must accept a lower inflation rate in return.

If a country has a population of 400 million, 160 million people employed and 40 million people looking for work, then its unemployment rate is

If you hear a person saying "I just relocated to this city after graduating from college and have yet to find an acceptable job in my field," you should conclude that this person is ________ unemployed.

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

If aggregate demand decreases and expectations regarding inflation remain constant

The Scope and Method of Economics

The Economic Problem: Scarcity and Choice

Demand, Supply, and Market Equilibrium

Demand and Supply Applications

Introduction to Macroeconomics

Measuring National Output and National Income

Unemployment, Inflation, and Long-Run Growth

Aggregate Expenditure and Equilibrium Output

The Government and Fiscal Policy

Money, the Federal Reserve, and the Interest Rate

The Determination of Aggregate Output, the Price Level, and the Interest Rate

Policy Effects and Cost Shocks in the Asad Model

Financial Crises, Stabilization, and Deficits

Household and Firm Behavior in the Macroeconomy: a Further Look

Long-Run Growth

Alternative Views in Macroeconomics

International Trade, Comparative Advantage, and Protectionism

Open-Economy Macroeconomics: the Balance of Payments and Exchange Rates

Economic Growth in Developing Economies

Critical Thinking About Research

Filters

If the curve shifts from year to year and the curve does not, then the Phillips curve would show a positive relationship between inflation and unemployment rates.

Refer to the information provided in Figure 13.7 below to answer the questions that follow. Figure 13.7 -Refer to Figure 13.7. If the economy is on SRPC₃, then the expected inflation rate is

Minimum wage is an example of a price , and results in a of labor.