Question 1

Which of the following is NOT a potential reason for offering a wage above the market wage?

Accepted Answer

A)  A higher wage contributes to improved worker health. 
B)  A higher wage makes the opportunity cost of losing a job higher, thus reducing "shirking." 
C)  It reduces moral hazard. 
D)  Higher wages attract more productive workers. 
E)  Higher wages signal prestige and thus attract workers from elite schools. 
A)  A higher wage contributes to improved worker health. 
B)  A higher wage makes the opportunity cost of losing a job higher, thus reducing "shirking." 
C)  It reduces moral hazard. 
D)  Higher wages attract more productive workers. 
E)  Higher wages signal prestige and thus attract workers from elite schools. E

Question 2

The idea that you value receiving $1,000 today more than 10 years in the future is called compound interest.

Accepted Answer

A) True 
 B)False  False

Question 3

In the labor market depicted in Figure 7.3, an increase in oil prices:

Accepted Answer

A)  shifts labor demand from   to   . 
B)  shifts labor supply from   to   . 
C)  shifts labor demand from   to   . 
D)  produces no change in either the labor supply or demand curve. 
E)  None of these answers is correct. 
A)  shifts labor demand from   to   . 
B)  shifts labor supply from   to   . 
C)  shifts labor demand from   to   . 
D)  produces no change in either the labor supply or demand curve. 
E)  None of these answers is correct. C

Question 4

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 left 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 left work. 
D)  during seasonal changes in the economy. 
E)  if the unemployment rate were zero.

Question 5

The unemployment rate is defined as the ratio of:

Accepted Answer

A)  all adults not working to the total population. 
B)  unemployed to employed members of the labor force. 
C)  unemployed members of the labor force to the total labor force. 
D)  discouraged workers to the total population. 
E)  unemployed members of the labor force to the total population. 
A)  all adults not working to the total population. 
B)  unemployed to employed members of the labor force. 
C)  unemployed members of the labor force to the total labor force. 
D)  discouraged workers to the total population. 
E)  unemployed members of the labor force to the total population.

Question 6

Refer to the following figure to answer the following questions.
Figure 7.1: U.S. Unemployment Rate: 1975-2015   (Source: U.S. Bureau of Labor Statistics)
-Using Figure 7.1, Which of the following year(s) are the approximate trough of a recession?

Accepted Answer

A)  2001 
B)  1983 
C)  1979 
D)  2012 
E)  All of these answers are correct. 
A)  2001 
B)  1983 
C)  1979 
D)  2012 
E)  All of these answers are correct.

Question 7

If the civilian noninstitutionalized population is 230,108, the number of employed is 145,926, the number of unemployed is 6,849, and the number of discouraged workers is 77,676, the unemployment rate is about 3.0 percent.

Accepted Answer

A) True 
 B)False

Question 8

Refer to the following figure when answering the following questions.
Figure 7.5: Labor Market  
-Consider Figure 7.5. If the demand curve for college graduates is characterized by   , which of the following is a reason why the demand for labor for college graduates is higher than that for high school students, characterized by  
?

Accepted Answer

A)  skill-based technological change for high school students 
B)  low saving rates 
C)  fewer college graduates than high school graduates 
D)  a growing number of college graduates 
E)  specialization 
A)  skill-based technological change for high school students 
B)  low saving rates 
C)  fewer college graduates than high school graduates 
D)  a growing number of college graduates 
E)  specialization

Question 9

Refer to the following table to answer the following questions.
Table 7.1: U.S. Employment Status (in thousands)  
-Consider Table 7.1. Between 2010 and 2015, the unemployment rate ________ and the employment-population ratio ________ (rounded to 1 decimal point).

Accepted Answer

A)  rose; fell 
B)  rose; rose 
C)  fell; rose 
D)  fell; fell 
E)  Not enough information is given. 
A)  rose; fell 
B)  rose; rose 
C)  fell; rose 
D)  fell; fell 
E)  Not enough information is given.

Question 10

The cause(s) of increased female participation in the labor market is/are:

Accepted Answer

A)  changing social norms. 
B)  technological changes in managing fertility. 
C)  increased discrimination. 
D)  the baby boom. 
E)  changing social norms and increased discrimination. 
A)  changing social norms. 
B)  technological changes in managing fertility. 
C)  increased discrimination. 
D)  the baby boom. 
E)  changing social norms and increased discrimination.

Question 11

If the minimum wage is set below the equilibrium wage, it will have no effect on unemployment.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

The labor demand curve is derived from the marginal product of labor.

Accepted Answer

A) True 
 B)False

Question 14

The average unemployment benefit of an American worker is about $300 per week and lasts 26 weeks.

Accepted Answer

A) True 
 B)False

Question 15

Unemployment due to institutional frictions is called structural unemployment.

Accepted Answer

A) True 
 B)False

Question 16

Refer to the following table 7.2 when answering the following questions.

-Consider the data in Table 7.2. Using the "bathtub model" of unemployment, in 2015 the natural rate of unemployment was ________ percent.

Accepted Answer

A)  7.0 
B)  7.5 
C)  5.0 
D)  93.0 
E)  30.6 
A)  7.0 
B)  7.5 
C)  5.0 
D)  93.0 
E)  30.6

Question 17

What has been happening to cause returns to a college education over the past 50 years or so, compared to only receiving a high school education? What explains this difference?

Accepted Answer

See Figure 7.8 in the text. College wage

Question 18

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

Accepted Answer

A)  if inflation were zero. 
B)  if there were no discouraged workers. 
C)  if the economy were in neither a boom nor a recession. 
D)  during seasonal changes in the economy. 
E)  if the unemployment rate were zero. 
A)  if inflation were zero. 
B)  if there were no discouraged workers. 
C)  if the economy were in neither a boom nor a recession. 
D)  during seasonal changes in the economy. 
E)  if the unemployment rate were zero.

Question 19

Beginning in 2007, the ________ to roughly mid-1980s levels.

Accepted Answer

A)  employment-population ratio rose 
B)  unemployment rate fell 
C)  inflation rate rose 
D)  share of women in the labor force fell 
E)  employment-population ratio fell 
A)  employment-population ratio rose 
B)  unemployment rate fell 
C)  inflation rate rose 
D)  share of women in the labor force fell 
E)  employment-population ratio fell

Question 20

Refer to the following table to answer the following questions.
Table 7.1: U.S. Employment Status (in thousands)  
-Consider Table 7.1. In 2010, the employment-population ratio was ________ percent.

Accepted Answer

A)  64.7 
B)  60.2 
C)  9.6 
D)  58.5 
E)  90.4 
A)  64.7 
B)  60.2 
C)  9.6 
D)  58.5 
E)  90.4

Which of the following is NOT a potential reason for offering a wage above the market wage?

The idea that you value receiving $1,000 today more than 10 years in the future is called compound interest.

In the labor market depicted in Figure 7.3, an increase in oil prices:

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

The unemployment rate is defined as the ratio of:

Refer to the following figure to answer the following questions. Figure 7.1: U.S. Unemployment Rate: 1975-2015 (Source: U.S. Bureau of Labor Statistics) -Using Figure 7.1, Which of the following year(s) are the approximate trough of a recession?

If the civilian noninstitutionalized population is 230,108, the number of employed is 145,926, the number of unemployed is 6,849, and the number of discouraged workers is 77,676, the unemployment rate is about 3.0 percent.

Refer to the following table to answer the following questions. Table 7.1: U.S. Employment Status (in thousands) -Consider Table 7.1. Between 2010 and 2015, the unemployment rate and the employment-population ratio (rounded to 1 decimal point).

The cause(s) of increased female participation in the labor market is/are:

If the minimum wage is set below the equilibrium wage, it will have no effect on unemployment.

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

The labor demand curve is derived from the marginal product of labor.

The average unemployment benefit of an American worker is about $300 per week and lasts 26 weeks.

Unemployment due to institutional frictions is called structural unemployment.

Refer to the following table 7.2 when answering the following questions. -Consider the data in Table 7.2. Using the "bathtub model" of unemployment, in 2015 the natural rate of unemployment was ________ percent.

What has been happening to cause returns to a college education over the past 50 years or so, compared to only receiving a high school education? What explains this difference?

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

Beginning in 2007, the ________ to roughly mid-1980s levels.

Refer to the following table to answer the following questions. Table 7.1: U.S. Employment Status (in thousands) -Consider Table 7.1. In 2010, the employment-population ratio was ________ percent.

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

Dsge Models: the Frontier of Business Cycle Research

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

Which of the following is NOT a potential reason for offering a wage above the market wage?

The idea that you value receiving $1,000 today more than 10 years in the future is called compound interest.

In the labor market depicted in Figure 7.3, an increase in oil prices:

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

The unemployment rate is defined as the ratio of:

Refer to the following figure to answer the following questions. Figure 7.1: U.S. Unemployment Rate: 1975-2015 (Source: U.S. Bureau of Labor Statistics) -Using Figure 7.1, Which of the following year(s) are the approximate trough of a recession?

If the civilian noninstitutionalized population is 230,108, the number of employed is 145,926, the number of unemployed is 6,849, and the number of discouraged workers is 77,676, the unemployment rate is about 3.0 percent.

Refer to the following table to answer the following questions. Table 7.1: U.S. Employment Status (in thousands) -Consider Table 7.1. Between 2010 and 2015, the unemployment rate ________ and the employment-population ratio ________ (rounded to 1 decimal point).

The cause(s) of increased female participation in the labor market is/are:

If the minimum wage is set below the equilibrium wage, it will have no effect on unemployment.

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

The labor demand curve is derived from the marginal product of labor.

The average unemployment benefit of an American worker is about $300 per week and lasts 26 weeks.

Unemployment due to institutional frictions is called structural unemployment.

Refer to the following table 7.2 when answering the following questions. -Consider the data in Table 7.2. Using the "bathtub model" of unemployment, in 2015 the natural rate of unemployment was ________ percent.

What has been happening to cause returns to a college education over the past 50 years or so, compared to only receiving a high school education? What explains this difference?

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

Beginning in 2007, the ________ to roughly mid-1980s levels.

Refer to the following table to answer the following questions. Table 7.1: U.S. Employment Status (in thousands) -Consider Table 7.1. In 2010, the employment-population ratio was ________ percent.

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

Dsge Models: the Frontier of Business Cycle Research

Consumption

Investment

The Government and the Macroeconomy

International Trade

Exchange Rates and International Finance

Parting Thoughts

Filters

Refer to the following table to answer the following questions. Table 7.1: U.S. Employment Status (in thousands) -Consider Table 7.1. Between 2010 and 2015, the unemployment rate and the employment-population ratio (rounded to 1 decimal point).