Question 1

According to studies of individual unemployed workers, these workers are most likely to find a job:

Accepted Answer

A)  about three months before their unemployment insurance runs out. 
B)  within a few weeks of their unemployment insurance running out. 
C)  about three months after their unemployment insurance runs out. 
D)  at a time not influenced by the remaining number of weeks of unemployment insurance. 
A)  about three months before their unemployment insurance runs out. 
B)  within a few weeks of their unemployment insurance running out. 
C)  about three months after their unemployment insurance runs out. 
D)  at a time not influenced by the remaining number of weeks of unemployment insurance.

Question 2

Wage rigidity:

Accepted Answer

A)  forces labor demand to equal labor supply. 
B)  is caused by sectoral shifts. 
C)  prevents labor demand and labor supply from reaching the equilibrium level. 
D)  increases the rate of job finding. 
A)  forces labor demand to equal labor supply. 
B)  is caused by sectoral shifts. 
C)  prevents labor demand and labor supply from reaching the equilibrium level. 
D)  increases the rate of job finding.

Question 3

When the real wage is above the level that equilibrates supply and demand:

Accepted Answer

A)  the quantity of labor supplied exceeds the quantity demanded. 
B)  the quantity of labor demanded exceeds the quantity supplied. 
C)  there is no unemployment. 
D)  the labor market clears. 
A)  the quantity of labor supplied exceeds the quantity demanded. 
B)  the quantity of labor demanded exceeds the quantity supplied. 
C)  there is no unemployment. 
D)  the labor market clears.

Question 4

Compared with an employed white teenage male, an employed middle-aged white male is ______ likely to become unemployed and, once unemployed, is ______ likely to find a job.

Accepted Answer

A)  less; more 
B)  less; just as 
C)  more; less 
D)  just as; more 
A)  less; more 
B)  less; just as 
C)  more; less 
D)  just as; more

Question 5

The natural rate of unemployment in the United States since 1950 has averaged between ______ and ______ percent.

Accepted Answer

A)  0; 1 
B)  1; 3 
C)  5; 6 
D)  10; 15 
A)  0; 1 
B)  1; 3 
C)  5; 6 
D)  10; 15

Question 6

If s is the rate of job separation, f is the rate of job finding, and both rates are constant, then the unemployment rate is approximately:

Accepted Answer

A)  f/(f + s). 
B)  (f + s)/f. 
C)  s/(s + f). 
D)  (s + f)/s. 
A)  f/(f + s). 
B)  (f + s)/f. 
C)  s/(s + f). 
D)  (s + f)/s.

Question 7

Assume that a country experiences a reduction in productivity that lowers the marginal product of labor for any given level of labor. In this case, the:

Accepted Answer

A)  labor supply curve shifts to the right. 
B)  labor supply curve shifts to the left. 
C)  labor demand curve shifts upward and to the right. 
D)  labor demand curve shifts downward and to the left. 
A)  labor supply curve shifts to the right. 
B)  labor supply curve shifts to the left. 
C)  labor demand curve shifts upward and to the right. 
D)  labor demand curve shifts downward and to the left.

Question 8

When insiders have a much greater impact on the wage-bargaining process than do outsiders, the negotiated wage is likely to be ______ the equilibrium wage.

Accepted Answer

A)  much greater than 
B)  much less than 
C)  almost equal to 
D)  about one-half of 
A)  much greater than 
B)  much less than 
C)  almost equal to 
D)  about one-half of

Question 9

Entry into and exit from the labor force are important to the determination of the unemployment rate because:

Accepted Answer

A)  more than one-half of the unemployed have only recently entered the labor force. 
B)  most of the unemployed are young workers still looking for their first job. 
C)  discouraged workers are counted as part of the labor force. 
D)  almost one-half of all spells of unemployment end in the unemployed person's withdrawal from the labor market. 
A)  more than one-half of the unemployed have only recently entered the labor force. 
B)  most of the unemployed are young workers still looking for their first job. 
C)  discouraged workers are counted as part of the labor force. 
D)  almost one-half of all spells of unemployment end in the unemployed person's withdrawal from the labor market.

Question 10

The percentage of workers who belong to unions in the United States is approximately:

Accepted Answer

A)  13 percent. 
B)  23 percent. 
C)  33 percent. 
D)  53 percent. 
A)  13 percent. 
B)  23 percent. 
C)  33 percent. 
D)  53 percent.

Question 11

Results from the Euro-Barometer Survey series suggests that people are happier when inflation is ______ and unemployment is ______.

Accepted Answer

A)  high; high 
B)  high; low 
C)  low; high 
D)  low; low 
A)  high; high 
B)  high; low 
C)  low; high 
D)  low; low

Question 12

Most spells of unemployment are ______ term, and most weeks of unemployment are attributable to ______-term unemployment.

Accepted Answer

A)  short; short 
B)  short; long 
C)  long; long 
D)  long; short 
A)  short; short 
B)  short; long 
C)  long; long 
D)  long; short

Question 13

The model of the steady-state rate of unemployment assumes that the size of the labor force is fixed. If the size of the labor force is allowed to vary: a. explain how the job-loss and job-finding processes will differ from the situation when the labor force is fixed.
b. explain how interpretations of changes in the unemployment rate will become less clear?

Accepted Answer

a. With a varying labor force, job finde

Question 14

In a steady state:

Accepted Answer

A)  no hiring or firings are occurring. 
B)  the number of people finding jobs equals the number of people losing jobs. 
C)  the number of people finding jobs exceeds the number of people losing jobs. 
D)  the number of people losing jobs exceeds the number of people finding jobs. 
A)  no hiring or firings are occurring. 
B)  the number of people finding jobs equals the number of people losing jobs. 
C)  the number of people finding jobs exceeds the number of people losing jobs. 
D)  the number of people losing jobs exceeds the number of people finding jobs.

Question 15

Frictional unemployment is unemployment caused by:

Accepted Answer

A)  wage rigidity. 
B)  minimum-wage legislation. 
C)  the time it takes workers to search for a job. 
D)  clashes between the motives of insiders and outsiders. 
A)  wage rigidity. 
B)  minimum-wage legislation. 
C)  the time it takes workers to search for a job. 
D)  clashes between the motives of insiders and outsiders.

Question 16

Examples of "active" labor-market policies include all of the following except:

Accepted Answer

A)  job-search assistance 
B)  subsidized employment 
C)  unemployment insurance 
D)  job-training programs 
A)  job-search assistance 
B)  subsidized employment 
C)  unemployment insurance 
D)  job-training programs

Question 17

According to Blanchard, Europeans are more likely to use increases in real wages resulting from technological progress to increase ______, and Americans are more likely to use these increases in real wages to increase ______.

Accepted Answer

A)  hours of work; hours of leisure 
B)  consumption of goods and services; hours of leisure 
C)  hours of leisure; consumption of goods and services 
D)  unemployment insurance benefits; efficiency wages 
A)  hours of work; hours of leisure 
B)  consumption of goods and services; hours of leisure 
C)  hours of leisure; consumption of goods and services 
D)  unemployment insurance benefits; efficiency wages

Question 18

Assume that a country experiences a reduction in productivity that shifts the labor demand curve downward and to the left. If the labor market were always in equilibrium, this would lead to:

Accepted Answer

A)  a lower real wage and a rise in unemployment. 
B)  a lower real wage and no change in unemployment. 
C)  a lower real wage and less unemployment. 
D)  no change in real wage or in unemployment. 
A)  a lower real wage and a rise in unemployment. 
B)  a lower real wage and no change in unemployment. 
C)  a lower real wage and less unemployment. 
D)  no change in real wage or in unemployment.

Question 19

Which of the following statements correctly describes European labor markets?

Accepted Answer

A)  In recent years, the unemployment rate in every European country has been higher than the unemployment rate in the United States. 
B)  In recent years, the average unemployment rate in Europe has been higher than the unemployment rate in the United States. 
C)  Within Europe the short-term unemployment rate shows greater variability across countries than does the long-term unemployment rate. 
D)  European countries with more generous unemployment insurance tend to have lower unemployment rates. 
A)  In recent years, the unemployment rate in every European country has been higher than the unemployment rate in the United States. 
B)  In recent years, the average unemployment rate in Europe has been higher than the unemployment rate in the United States. 
C)  Within Europe the short-term unemployment rate shows greater variability across countries than does the long-term unemployment rate. 
D)  European countries with more generous unemployment insurance tend to have lower unemployment rates.

Question 20

When outsiders have a greater role than do insiders in the wage-bargaining process, the negotiated wage is likely to be ______ the equilibrium wage.

Accepted Answer

A)  much greater than 
B)  much less than 
C)  much closer to 
D)  about twice 
A)  much greater than 
B)  much less than 
C)  much closer to 
D)  about twice

According to studies of individual unemployed workers, these workers are most likely to find a job:

Wage rigidity:

When the real wage is above the level that equilibrates supply and demand:

Compared with an employed white teenage male, an employed middle-aged white male is likely to become unemployed and, once unemployed, is likely to find a job.

The natural rate of unemployment in the United States since 1950 has averaged between and percent.

If s is the rate of job separation, f is the rate of job finding, and both rates are constant, then the unemployment rate is approximately:

Assume that a country experiences a reduction in productivity that lowers the marginal product of labor for any given level of labor. In this case, the:

When insiders have a much greater impact on the wage-bargaining process than do outsiders, the negotiated wage is likely to be ______ the equilibrium wage.

Entry into and exit from the labor force are important to the determination of the unemployment rate because:

The percentage of workers who belong to unions in the United States is approximately:

Results from the Euro-Barometer Survey series suggests that people are happier when inflation is and unemployment is .

Most spells of unemployment are term, and most weeks of unemployment are attributable to -term unemployment.

In a steady state:

Frictional unemployment is unemployment caused by:

Examples of "active" labor-market policies include all of the following except:

According to Blanchard, Europeans are more likely to use increases in real wages resulting from technological progress to increase , and Americans are more likely to use these increases in real wages to increase .

Assume that a country experiences a reduction in productivity that shifts the labor demand curve downward and to the left. If the labor market were always in equilibrium, this would lead to:

Which of the following statements correctly describes European labor markets?

When outsiders have a greater role than do insiders in the wage-bargaining process, the negotiated wage is likely to be ______ the equilibrium wage.

The Science of Macroeconomics

The Data of Macroeconomics

National Income: Where It Comes From and Where It Goes

The Monetary System: What It Is and How It Works

Inflation: Its Causes, Effects, and Social Costs

The Open Economy

Economic Growth I: Capital Accumulation and Population Growth

Economic Growth II: Technology, Empirics, and Policy

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Is-Lm Model

Aggregate Demand Ii: Applying the Is-Lm Model

The Open Economy Revisited: the Mundell-Fleming Model and the Exchange-Rate Regime

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

A Dynamic Model of Economic Fluctuations

Understanding Consumer Behavior

The Theory of Investment

Alternative Perspectives on Stabilization Policy

Government Debt and Budget Deficits

The Financial System: Opportunities and Dangers

Filters

Exam 7: Unemployment and the Labor Market

According to studies of individual unemployed workers, these workers are most likely to find a job:

Wage rigidity:

When the real wage is above the level that equilibrates supply and demand:

Compared with an employed white teenage male, an employed middle-aged white male is ______ likely to become unemployed and, once unemployed, is ______ likely to find a job.

The natural rate of unemployment in the United States since 1950 has averaged between ______ and ______ percent.

If s is the rate of job separation, f is the rate of job finding, and both rates are constant, then the unemployment rate is approximately:

Assume that a country experiences a reduction in productivity that lowers the marginal product of labor for any given level of labor. In this case, the:

When insiders have a much greater impact on the wage-bargaining process than do outsiders, the negotiated wage is likely to be ______ the equilibrium wage.

Entry into and exit from the labor force are important to the determination of the unemployment rate because:

The percentage of workers who belong to unions in the United States is approximately:

Results from the Euro-Barometer Survey series suggests that people are happier when inflation is ______ and unemployment is ______.

Most spells of unemployment are ______ term, and most weeks of unemployment are attributable to ______-term unemployment.

In a steady state:

Frictional unemployment is unemployment caused by:

Examples of "active" labor-market policies include all of the following except:

According to Blanchard, Europeans are more likely to use increases in real wages resulting from technological progress to increase ______, and Americans are more likely to use these increases in real wages to increase ______.

Assume that a country experiences a reduction in productivity that shifts the labor demand curve downward and to the left. If the labor market were always in equilibrium, this would lead to:

Which of the following statements correctly describes European labor markets?

When outsiders have a greater role than do insiders in the wage-bargaining process, the negotiated wage is likely to be ______ the equilibrium wage.

The Science of Macroeconomics

The Data of Macroeconomics

National Income: Where It Comes From and Where It Goes

The Monetary System: What It Is and How It Works

Inflation: Its Causes, Effects, and Social Costs

The Open Economy

Economic Growth I: Capital Accumulation and Population Growth

Economic Growth II: Technology, Empirics, and Policy

Introduction to Economic Fluctuations

Aggregate Demand I: Building the Is-Lm Model

Aggregate Demand Ii: Applying the Is-Lm Model

The Open Economy Revisited: the Mundell-Fleming Model and the Exchange-Rate Regime

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

A Dynamic Model of Economic Fluctuations

Understanding Consumer Behavior

The Theory of Investment

Alternative Perspectives on Stabilization Policy

Government Debt and Budget Deficits

The Financial System: Opportunities and Dangers

Filters

Compared with an employed white teenage male, an employed middle-aged white male is likely to become unemployed and, once unemployed, is likely to find a job.

The natural rate of unemployment in the United States since 1950 has averaged between and percent.

Results from the Euro-Barometer Survey series suggests that people are happier when inflation is and unemployment is .

Most spells of unemployment are term, and most weeks of unemployment are attributable to -term unemployment.

According to Blanchard, Europeans are more likely to use increases in real wages resulting from technological progress to increase , and Americans are more likely to use these increases in real wages to increase .