Question 1

Compared to a labor market that has no unemployment benefit system, the unemployment insurance system of the United States probably

Accepted Answer

A)  leads to shorter spells of unemployment. 
B)  increases the unemployment rate. 
C)  leads to lower post-unemployment wages. 
D)  provides for a lower standard of living while unemployed. 
E)  is less costly for firms. 
A)  leads to shorter spells of unemployment. 
B)  increases the unemployment rate. 
C)  leads to lower post-unemployment wages. 
D)  provides for a lower standard of living while unemployed. 
E)  is less costly for firms.

Question 2

James is currently unemployed. He is disappointed every Sunday when none of the job advertisements in the newspaper are for workers with his particular skill set. What type of unemployment is James experiencing?

Accepted Answer

A)  frictional unemployment 
B)  seasonal unemployment 
C)  cyclical unemployment 
D)  structural unemployment 
E)  natural unemployment 
A)  frictional unemployment 
B)  seasonal unemployment 
C)  cyclical unemployment 
D)  structural unemployment 
E)  natural unemployment

Question 3

The short-run Phillips curve is ________, while the long-run Phillips curve is vertical at the ________.

Accepted Answer

A)  downward sloping; real wage 
B)  downward sloping; natural rate of unemployment 
C)  upward sloping; minimum wage 
D)  upward sloping; average nominal wage rate 
E)  horizontal; origin 
A)  downward sloping; real wage 
B)  downward sloping; natural rate of unemployment 
C)  upward sloping; minimum wage 
D)  upward sloping; average nominal wage rate 
E)  horizontal; origin

Question 4

Why is frictional unemployment considered to be productive?

Accepted Answer

A)  Search activities of workers and firms resulting in frictional unemployment improve the allocation of resources. 
B)  Firms do not hire a worker until they find the most educated worker. 
C)  There are more potential workers seeking jobs than there are jobs for workers when there is frictional unemployment. 
D)  The demand for highly skilled workers exceeds the supply of highly skilled workers when there is frictional unemployment. 
E)  Frictional unemployment leads to a decrease in the unemployment rate. 
A)  Search activities of workers and firms resulting in frictional unemployment improve the allocation of resources. 
B)  Firms do not hire a worker until they find the most educated worker. 
C)  There are more potential workers seeking jobs than there are jobs for workers when there is frictional unemployment. 
D)  The demand for highly skilled workers exceeds the supply of highly skilled workers when there is frictional unemployment. 
E)  Frictional unemployment leads to a decrease in the unemployment rate.

Question 5

If the intertemporal substitution hypothesis is correct, then

Accepted Answer

A)  the unemployment rate is always artificially high. 
B)  the unemployment rate is always artificially low. 
C)  discouraged workers should be included in the unemployed population because they actually want a job at the going wage. 
D)  discouraged workers should not be included in the unemployed population because they are optimally choosing more leisure during a time of low wages. 
E)  discouraged workers will not exist. 
A)  the unemployment rate is always artificially high. 
B)  the unemployment rate is always artificially low. 
C)  discouraged workers should be included in the unemployed population because they actually want a job at the going wage. 
D)  discouraged workers should not be included in the unemployed population because they are optimally choosing more leisure during a time of low wages. 
E)  discouraged workers will not exist.

Question 6

How does the asking wage depend on the unemployment insurance (UI) system in the United States?

Accepted Answer

A)  The asking wage is constant regardless of the unemployment insurance system. 
B)  The asking wage will fall as the unemployed worker gets closer to exhausting his or her UI benefits. 
C)  The asking wage is lower while receiving UI benefits than after one's UI benefits have expired. 
D)  The asking wage is lower the more likely it is to receive a job offer. 
E)  The asking wage is lower the more skills the unemployed worker has. 
A)  The asking wage is constant regardless of the unemployment insurance system. 
B)  The asking wage will fall as the unemployed worker gets closer to exhausting his or her UI benefits. 
C)  The asking wage is lower while receiving UI benefits than after one's UI benefits have expired. 
D)  The asking wage is lower the more likely it is to receive a job offer. 
E)  The asking wage is lower the more skills the unemployed worker has.

Question 7

Anna works on a farm every spring during planting season and every fall during the harvest season. The farm fails to employ Anna during the summer or the winter. What type of unemployment does Anna experience?

Accepted Answer

A)  frictional unemployment 
B)  seasonal unemployment 
C)  cyclical unemployment 
D)  structural unemployment 
E)  natural unemployment 
A)  frictional unemployment 
B)  seasonal unemployment 
C)  cyclical unemployment 
D)  structural unemployment 
E)  natural unemployment

Question 8

In the United States from 1950 to 2000, it was most likely that an unemployed person would

Accepted Answer

A)  be re-employed in less than 5 weeks. 
B)  be re-employed in 5 to 14 weeks. 
C)  be re-employed in 14 to 26 weeks. 
D)  be re-employed in more than 26 weeks. 
E)  exit the labor force. 
A)  be re-employed in less than 5 weeks. 
B)  be re-employed in 5 to 14 weeks. 
C)  be re-employed in 14 to 26 weeks. 
D)  be re-employed in more than 26 weeks. 
E)  exit the labor force.

Question 9

In the United States, the average replacement ratio associated with unemployment insurance benefits is

Accepted Answer

A)  10%. 
B)  35%. 
C)  50%. 
D)  80%. 
E)  100%. 
A)  10%. 
B)  35%. 
C)  50%. 
D)  80%. 
E)  100%.

Question 10

The main argument in favor of the existence of a natural rate of unemployment in the long run focuses on what argument?

Accepted Answer

A)  Workers will adjust their inflationary expectations in the long run so that unemployment is unrelated to inflation. 
B)  Workers refuse to be unemployed in the long run. 
C)  Firms need to be at full employment in the long run. 
D)  Wages will always adjust to make the long-run unemployment rate zero percent. 
E)  The government cannot affect inflation in the long run. 
A)  Workers will adjust their inflationary expectations in the long run so that unemployment is unrelated to inflation. 
B)  Workers refuse to be unemployed in the long run. 
C)  Firms need to be at full employment in the long run. 
D)  Wages will always adjust to make the long-run unemployment rate zero percent. 
E)  The government cannot affect inflation in the long run.

Compared to a labor market that has no unemployment benefit system, the unemployment insurance system of the United States probably

James is currently unemployed. He is disappointed every Sunday when none of the job advertisements in the newspaper are for workers with his particular skill set. What type of unemployment is James experiencing?

The short-run Phillips curve is , while the long-run Phillips curve is vertical at the .

Why is frictional unemployment considered to be productive?

If the intertemporal substitution hypothesis is correct, then

How does the asking wage depend on the unemployment insurance (UI) system in the United States?

Anna works on a farm every spring during planting season and every fall during the harvest season. The farm fails to employ Anna during the summer or the winter. What type of unemployment does Anna experience?

In the United States from 1950 to 2000, it was most likely that an unemployed person would

In the United States, the average replacement ratio associated with unemployment insurance benefits is

The main argument in favor of the existence of a natural rate of unemployment in the long run focuses on what argument?

Introduction to Labor Economics

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

Human Capital

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Filters

Exam 12: Unemployment

Compared to a labor market that has no unemployment benefit system, the unemployment insurance system of the United States probably

James is currently unemployed. He is disappointed every Sunday when none of the job advertisements in the newspaper are for workers with his particular skill set. What type of unemployment is James experiencing?

The short-run Phillips curve is ________, while the long-run Phillips curve is vertical at the ________.

Why is frictional unemployment considered to be productive?

If the intertemporal substitution hypothesis is correct, then

How does the asking wage depend on the unemployment insurance (UI) system in the United States?

Anna works on a farm every spring during planting season and every fall during the harvest season. The farm fails to employ Anna during the summer or the winter. What type of unemployment does Anna experience?

In the United States from 1950 to 2000, it was most likely that an unemployed person would

In the United States, the average replacement ratio associated with unemployment insurance benefits is

The main argument in favor of the existence of a natural rate of unemployment in the long run focuses on what argument?

Introduction to Labor Economics

Labor Supply

Labor Demand

Labor Market Equilibrium

Compensating Wage Differentials

Human Capital

The Wage Structure

Labor Mobility

Labor Market Discrimination

Labor Unions

Incentive Pay

Filters

The short-run Phillips curve is , while the long-run Phillips curve is vertical at the .