Question 1

Permitting a lower minimum wage for teenagers would likely:

Accepted Answer

A)  raise teenage unemployment. 
B)  raise teenage wages overall. 
C)  prevent teenagers from getting job experience. 
D)  raise unemployment among unskilled adults. 
A)  raise teenage unemployment. 
B)  raise teenage wages overall. 
C)  prevent teenagers from getting job experience. 
D)  raise unemployment among unskilled adults.

Question 2

"The unemployment rate can be reduced by decreasing the rate of job separation and increasing the rate of job finding." What measures can government take to help control these rates? Give one example for each.

Accepted Answer

Government can control the rate of job s

Question 3

One efficiency-wage theory implies that firms pay high wages because:

Accepted Answer

A)  this practice increases the problem of moral hazard. 
B)  in wealthy countries, it is important to pay workers high wages to improve their health. 
C)  the more a firm pays its workers, the greater their incentive to stay with the firm. 
D)  paying high wages promotes adverse selection. 
A)  this practice increases the problem of moral hazard. 
B)  in wealthy countries, it is important to pay workers high wages to improve their health. 
C)  the more a firm pays its workers, the greater their incentive to stay with the firm. 
D)  paying high wages promotes adverse selection.

Question 4

When there is structural unemployment, the real wage is:

Accepted Answer

A)  rigid at a level below the market-clearing level. 
B)  rigid at the market-clearing level. 
C)  rigid at a level above the market-clearing level. 
D)  flexible. 
A)  rigid at a level below the market-clearing level. 
B)  rigid at the market-clearing level. 
C)  rigid at a level above the market-clearing level. 
D)  flexible.

Question 5

If the economy were at a steady-state unemployment rate with a separation rate of 0.02 per month and a job-finding rate of 0.10 per month, and the labor force was 100 million, how many individuals would lose their jobs each month?

Accepted Answer

The answer of If the economy were at a steady-state...

Question 6

Economists call the changes in the composition of demand among industries and regions:

Accepted Answer

A)  insider-outsider conflicts. 
B)  sectoral shifts. 
C)  moral hazard. 
D)  adverse selection. 
A)  insider-outsider conflicts. 
B)  sectoral shifts. 
C)  moral hazard. 
D)  adverse selection.

Question 7

The earned income tax credit:

Accepted Answer

A)  increases the government's tax revenue. 
B)  reduces the incomes of poor working families. 
C)  does not raise labor costs. 
D)  is not an alternative to raising the minimum wage. 
A)  increases the government's tax revenue. 
B)  reduces the incomes of poor working families. 
C)  does not raise labor costs. 
D)  is not an alternative to raising the minimum wage.

Question 8

Much of the difference in unemployment rates across Europe is attributable to differences in:

Accepted Answer

A)  short-term unemployment. 
B)  long-term unemployment. 
C)  frictional unemployment. 
D)  the natural rate of unemployment. 
A)  short-term unemployment. 
B)  long-term unemployment. 
C)  frictional unemployment. 
D)  the natural rate of unemployment.

Question 9

The generosity of unemployment insurance benefits is measured by:

Accepted Answer

A)  the replacement rate and the duration of benefits. 
B)  the median wage and the unemployment rate. 
C)  the price level and duration of unemployment. 
D)  the job-finding rate and the job-separation rate. 
A)  the replacement rate and the duration of benefits. 
B)  the median wage and the unemployment rate. 
C)  the price level and duration of unemployment. 
D)  the job-finding rate and the job-separation rate.

Question 10

European unemployment rates are positively correlated with each of the following except:

Accepted Answer

A)  the percentage of the previous wage replaced by unemployment insurance. 
B)  the percentage of the labor force that is unionized. 
C)  the length of the period during which unemployment benefits can be collected. 
D)  the amount of coordination among employers in bargaining with unions. 
A)  the percentage of the previous wage replaced by unemployment insurance. 
B)  the percentage of the labor force that is unionized. 
C)  the length of the period during which unemployment benefits can be collected. 
D)  the amount of coordination among employers in bargaining with unions.

Question 11

Assume that an employer believes that the "efficiency" (e) it can get from a particular worker, as a function of the hourly wage (w), is given by function e = -0.125w + 0.15w2 - 0.005w3, at least up to a wage of 30. a. Create a table of $w , e , e / w$, and $w / e$ for wages equal to $5,10,14,15,16,20$, and 25 .
b. Which wage gives the highest ratio of effici ency per unit of labor cost?
c. Once the firm has hit on an optimal $w$, whatever it is, would cutting wages whenever demand falls off increase or decrease wages per unit of efficiency?

Accepted Answer

@#LAT-DLM&
b. 15
c. Cutting wa

Question 12

The natural rate of unemployment is:

Accepted Answer

A)  the average rate of unemployment around which the economy fluctuates. 
B)  about 10 percent of the labor force. 
C)  a rate that never changes. 
D)  the transition of individuals between employment and unemployment. 
A)  the average rate of unemployment around which the economy fluctuates. 
B)  about 10 percent of the labor force. 
C)  a rate that never changes. 
D)  the transition of individuals between employment and unemployment.

Question 13

Which of the following characteristics made the 2008-2009 recession differ most sharply from previous recessions?

Accepted Answer

A)  a large spike in the duration of unemployment 
B)  a large increase in teenage unemployment 
C)  higher rates of female unemployment than rates of male unemployment 
D)  an increase in the rate of job separation and a decrease in the rate of job finding 
A)  a large spike in the duration of unemployment 
B)  a large increase in teenage unemployment 
C)  higher rates of female unemployment than rates of male unemployment 
D)  an increase in the rate of job separation and a decrease in the rate of job finding

Question 14

Policies to substantially reduce the natural rate of unemployment should be targeted at:

Accepted Answer

A)  the short-term unemployed. 
B)  the long-term unemployed 
C)  discouraged workers. 
D)  insiders and outsiders. 
A)  the short-term unemployed. 
B)  the long-term unemployed 
C)  discouraged workers. 
D)  insiders and outsiders.

Question 15

As the relative demand for unskilled workers falls, wages for unskilled workers ______ and unemployment compensation becomes a ______ attractive option.

Accepted Answer

A)  fall; more 
B)  fall; less 
C)  rise; more 
D)  rise; less 
A)  fall; more 
B)  fall; less 
C)  rise; more 
D)  rise; less

Question 16

Discouraged workers are counted as:

Accepted Answer

A)  part of the labor force. 
B)  out of the labor force. 
C)  employed. 
D)  unemployed. 
A)  part of the labor force. 
B)  out of the labor force. 
C)  employed. 
D)  unemployed.

Question 17

Across countries of Europe, greater spending on unemployment insurance tends to _____ unemployment and more "active" labor-market policies tend to _____ unemployment.

Accepted Answer

A)  increase; increase 
B)  increase; decrease 
C)  decrease; decrease 
D)  decrease; increase 
A)  increase; increase 
B)  increase; decrease 
C)  decrease; decrease 
D)  decrease; increase

Question 18

Unemployment caused by the time it takes workers to search for a job is called ______ unemployment.

Accepted Answer

A)  frictional 
B)  structural 
C)  efficiency 
D)  insider 
A)  frictional 
B)  structural 
C)  efficiency 
D)  insider

Question 19

All of the following are causes of structural unemployment except:

Accepted Answer

A)  minimum-wage laws. 
B)  the monopoly power of unions. 
C)  unemployment insurance. 
D)  efficiency wages. 
A)  minimum-wage laws. 
B)  the monopoly power of unions. 
C)  unemployment insurance. 
D)  efficiency wages.

Question 20

Which of the following statements most closely describes the variation in unemployment rates across countries in Europe?

Accepted Answer

A)  Countries with higher rates of unionization tend to have higher unemployment rates, but this is partially mitigated if wage negotiations are coordinated among employers. 
B)  Countries with higher rates of unionization tend to have higher unemployment rates and this tendency is exacerbated if wage negotiations are coordinated among employers. 
C)  Countries with more generous unemployment insurance benefits tend to have higher unemployment rates, but this is partially mitigated if the benefits are offered for a longer period of time. 
D)  Countries with more generous unemployment insurance tend to have lower unemployment rates, but this effect is completely offset if benefits are offered for a longer period of time. 
A)  Countries with higher rates of unionization tend to have higher unemployment rates, but this is partially mitigated if wage negotiations are coordinated among employers. 
B)  Countries with higher rates of unionization tend to have higher unemployment rates and this tendency is exacerbated if wage negotiations are coordinated among employers. 
C)  Countries with more generous unemployment insurance benefits tend to have higher unemployment rates, but this is partially mitigated if the benefits are offered for a longer period of time. 
D)  Countries with more generous unemployment insurance tend to have lower unemployment rates, but this effect is completely offset if benefits are offered for a longer period of time.

Permitting a lower minimum wage for teenagers would likely:

"The unemployment rate can be reduced by decreasing the rate of job separation and increasing the rate of job finding." What measures can government take to help control these rates? Give one example for each.

One efficiency-wage theory implies that firms pay high wages because:

When there is structural unemployment, the real wage is:

If the economy were at a steady-state unemployment rate with a separation rate of 0.02 per month and a job-finding rate of 0.10 per month, and the labor force was 100 million, how many individuals would lose their jobs each month?

Economists call the changes in the composition of demand among industries and regions:

The earned income tax credit:

Much of the difference in unemployment rates across Europe is attributable to differences in:

The generosity of unemployment insurance benefits is measured by:

European unemployment rates are positively correlated with each of the following except:

The natural rate of unemployment is:

Which of the following characteristics made the 2008-2009 recession differ most sharply from previous recessions?

Policies to substantially reduce the natural rate of unemployment should be targeted at:

As the relative demand for unskilled workers falls, wages for unskilled workers and unemployment compensation becomes a attractive option.

Discouraged workers are counted as:

Across countries of Europe, greater spending on unemployment insurance tends to _ unemployment and more "active" labor-market policies tend to _ unemployment.

Unemployment caused by the time it takes workers to search for a job is called ______ unemployment.

All of the following are causes of structural unemployment except:

Which of the following statements most closely describes the variation in unemployment rates across countries in Europe?

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

Permitting a lower minimum wage for teenagers would likely:

"The unemployment rate can be reduced by decreasing the rate of job separation and increasing the rate of job finding." What measures can government take to help control these rates? Give one example for each.

One efficiency-wage theory implies that firms pay high wages because:

When there is structural unemployment, the real wage is:

If the economy were at a steady-state unemployment rate with a separation rate of 0.02 per month and a job-finding rate of 0.10 per month, and the labor force was 100 million, how many individuals would lose their jobs each month?

Economists call the changes in the composition of demand among industries and regions:

The earned income tax credit:

Much of the difference in unemployment rates across Europe is attributable to differences in:

The generosity of unemployment insurance benefits is measured by:

European unemployment rates are positively correlated with each of the following except:

The natural rate of unemployment is:

Which of the following characteristics made the 2008-2009 recession differ most sharply from previous recessions?

Policies to substantially reduce the natural rate of unemployment should be targeted at:

As the relative demand for unskilled workers falls, wages for unskilled workers ______ and unemployment compensation becomes a ______ attractive option.

Discouraged workers are counted as:

Across countries of Europe, greater spending on unemployment insurance tends to _____ unemployment and more "active" labor-market policies tend to _____ unemployment.

Unemployment caused by the time it takes workers to search for a job is called ______ unemployment.

All of the following are causes of structural unemployment except:

Which of the following statements most closely describes the variation in unemployment rates across countries in Europe?

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

As the relative demand for unskilled workers falls, wages for unskilled workers and unemployment compensation becomes a attractive option.

Across countries of Europe, greater spending on unemployment insurance tends to _ unemployment and more "active" labor-market policies tend to _ unemployment.