Exam 13: The Labor Market in the Macroeconomy

The minimum wage law contributes to a

Suppose that air traffic controllers, whose wages have been locked into place by a two-year contract, are laid off during a recession. This example is consistent with the

Refer to the information provided in Figure 13.4 below to answer the questions that follow. Figure 13.4 -Refer to Figure 13.4. Suppose there is an increase in the fertility rate and this causes some men and women to place a higher value on their time spent in non-market activities. This will cause

According to the classical theory, a contractionary monetary policy ________ the price level and ________ output in the long run.

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

Lisa is currently not employed. She places a value of $12 an hour on her time in nonmarket activities. If Lisa is offered a job paying $17 an hour,

Refer to the information provided in Figure 13.1 below to answer the questions that follow. Figure 13.1 -Refer to Figure 13.1. The equilibrium wage rate is $________ and the equilibrium number of people employed is ________ million people.

Refer to the information provided in Figure 13.7 below to answer the questions that follow. Figure 13.7 -Refer to Figure 13.7. Suppose the economy is at Point B. What can possibly move the economy to Point E?

Refer to the information provided in Figure 13.8 below to answer the questions that follow. Figure 13.8 -Refer to Figure 13.8. Expected inflation at Point A ________ expected inflation at Point C.

If, as a result of imperfect information, firms set their wage rates ________ the market clearing wage rate, there will be a surplus of workers.

The ________ explanation for the existence of downwardly sticky wages emphasizes the contention that workers in one industry may be unwilling to accept a wage cut, unless they know that workers in other firms and industries are receiving similar cuts.

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

If firms start offering fewer employment benefits, such as less vacation time and a less desirable medical plan, we would expect the labor ________ curve to shift to the ________.

Sticky wages reduce unemployment.

The economy experiences both ________ and ________ when aggregate supply decreases and aggregate demand remains unchanged.

Frito Lay experienced a 20% drop in its sales. Even though the demand for its product decreased, Frito Lay did not cut the wages of its nonunionized workers. This is an example of

At the natural rate of unemployment, the economy can be considered to be at full employment.

The natural rate of unemployment is unemployment that occurs as a normal part of the functioning of the economy.

Refer to the information provided in Figure 13.5 below to answer the questions that follow. Figure 13.5 -Refer to Figure 13.5. Which panel shows the typical relationship between the price level and the unemployment rate?

Refer to the information provided in Figure 13.4 below to answer the questions that follow. Figure 13.4 -Refer to Figure 13.4. If the demand for labor ________ and wages are sticky on the downward side, there will be unemployment of 150 million.