Exam 7: Unemployment and the Labor Market

If the fraction of employed workers who lose their jobs each month (the rate of job separations) is 0.01 and the fraction of the unemployed who find a job each month is 0.09 (the rate of job findings), then the natural rate of unemployment is:

If the underground economy is larger in Europe than in the United States, then the difference in the _____ number of hours worked between Europe and the United States may be smaller than the difference in the _____ numbers of hours worked.

A policy that decreases the job separation rate _____ the natural rate of unemployment.

What is active labor market policy? Give some examples of active labor market policies that help in reducing the unemployment rates.

If paying efficiency wages higher than market-level should always be a problem for employers, then how is paying efficiency wages helpful for employers?

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

If wage rigidity holds the real wage above the equilibrium level, an increase in the supply of labor will ______ the number unemployed.

If the rate of job separation is 0.02 per month and the rate of job finding is 0.10 per month, what is the natural rate of unemployment?

The average unemployment rate in western Europe is higher than in the United States. a. Explain one difference between the European and U.S. economies that is consistent with more structural unemployment in Europe. b. Explain one difference between the European and U.S. economies that is consistent with more frictional unemployment in Europe.

All of the following policies were adopted by the government in an attempt to reduce the natural rate of unemployment except:

When Henry Ford paid his workers $5 per day when the prevailing wage was between $2 and $3 a day:

All of the following are reasons for frictional unemployment except:

Public policy to increase the job finding rate include _____ and public policy to decrease the job separation rate include _____.

The macroeconomic problem that affects individuals most directly and severely is:

The unemployment rate in the United States since 1952 has:

Sectoral shifts:

Many economists attribute part of the recent increase in European unemployment to:

Paying efficiency wages helps firms reduce the problem of moral hazard by:

Which of the following rankings (from most severe to least severe) best captures the degree of hardship associated with various types of unemployment?

Explain what type of wage rigidity is most likely to affect the unemployment rates of the following types of workers: a. workers with low marginal labor productivity, b. workers in the construction trades, such as plumbers and electricians, c. workers engaged in creative work that is not easily monitored.