Question 1

In the two-sided search model, the equilibrium effects of an increase in productivity are to

Accepted Answer

A) decrease market tightness, decrease unemployment, and decrease aggregate output. 
B) increase market tightness, decrease unemployment, and increase aggregate output. 
C) increase market tightness, increases unemployment, and increases aggregate output. 
D) increase market tightness, increase unemployment, and decrease aggregate output. 
E) decrease market tightness, decrease unemployment, and increase aggregate output. 
A) decrease market tightness, decrease unemployment, and decrease aggregate output. 
B) increase market tightness, decrease unemployment, and increase aggregate output. 
C) increase market tightness, increases unemployment, and increases aggregate output. 
D) increase market tightness, increase unemployment, and decrease aggregate output. 
E) decrease market tightness, decrease unemployment, and increase aggregate output. B

Question 2

According to the two-sided search model, in equilibrium labour market tightness tends to be high when

Accepted Answer

A) profits are close to zero. 
B) the cost of a vacancy is high relative to the firm's share of the surplus. 
C) the firm's share of the surplus is high relative to the cost of a vacancy. 
D) employment insurance benefits are high relative to the productivity of a match. 
E) the firm's share of the surplus is increasing in market tightness. 
A) profits are close to zero. 
B) the cost of a vacancy is high relative to the firm's share of the surplus. 
C) the firm's share of the surplus is high relative to the cost of a vacancy. 
D) employment insurance benefits are high relative to the productivity of a match. 
E) the firm's share of the surplus is increasing in market tightness. C

Question 3

In the two-sided search model, firms continue posting vacancies until the probability of matching with a worker is equal to

Accepted Answer

A) the unemployment rate. 
B) the ratio of the profits from a match to the number of matches. 
C) the ratio of the cost of posting a vacancy to the profits from a match. 
D) the real wage rate. 
E) the marginal product of labour. 
A) the unemployment rate. 
B) the ratio of the profits from a match to the number of matches. 
C) the ratio of the cost of posting a vacancy to the profits from a match. 
D) the real wage rate. 
E) the marginal product of labour. C

Question 4

Since World War II, the participation rate

Accepted Answer

A) has remained constant. 
B) has declined since 1980. 
C) has been quite variable. 
D) has declined. 
E) has increased. 
A) has remained constant. 
B) has declined since 1980. 
C) has been quite variable. 
D) has declined. 
E) has increased.

Question 5

In the two-sided search model, an increase in productivity causes

Accepted Answer

A) labour market tightness to fall and output to fall. 
B) labour market tightness to rise and output to fall. 
C) the vacancy rate to rise and the unemployment rate to fall. 
D) output to fall and the vacancy rate to fall. 
E) the vacancy rate and the unemployment rate to fall. 
A) labour market tightness to fall and output to fall. 
B) labour market tightness to rise and output to fall. 
C) the vacancy rate to rise and the unemployment rate to fall. 
D) output to fall and the vacancy rate to fall. 
E) the vacancy rate and the unemployment rate to fall.

Question 6

According to the two-sided search model, in equilibrium the number of firms is

Accepted Answer

A) positively related to the cost of posting a vacancy. 
B) the firm's share of the total surplus from a match. 
C) negatively related to the cost of posting a vacancy. 
D) negatively related to the productivity of a match. 
E) positively related to the level of employment insurance benefits. 
A) positively related to the cost of posting a vacancy. 
B) the firm's share of the total surplus from a match. 
C) negatively related to the cost of posting a vacancy. 
D) negatively related to the productivity of a match. 
E) positively related to the level of employment insurance benefits.

Question 7

In equilibrium, an increase in Employment Insurance benefits

Accepted Answer

A) decreases the unemployment rate and decreases the vacancy rate. 
B) increases the unemployment rate and increases the vacancy rate. 
C) decreases the unemployment rate and increases the vacancy rate. 
D) increases the unemployment rate and decreases the vacancy rate. 
E) increases the unemployment rate, but does not affect the vacancy rate. 
A) decreases the unemployment rate and decreases the vacancy rate. 
B) increases the unemployment rate and increases the vacancy rate. 
C) decreases the unemployment rate and increases the vacancy rate. 
D) increases the unemployment rate and decreases the vacancy rate. 
E) increases the unemployment rate, but does not affect the vacancy rate.

Question 8

In the one-sided search model, the welfare of an unemployed worker

Accepted Answer

A) is independent of employment insurance benefits. 
B) is irrelevant. 
C) decreases as market wages increase. 
D) increases with the size of the employment insurance benefit. 
E) depends only on government intervention in labour markets. 
A) is independent of employment insurance benefits. 
B) is irrelevant. 
C) decreases as market wages increase. 
D) increases with the size of the employment insurance benefit. 
E) depends only on government intervention in labour markets.

Question 9

Government-sponsored Employment Insurance programs typically

Accepted Answer

A) reduce the unemployment rate because they boost worker morale. 
B) increase the unemployment rate by increasing the average duration of unemployment. 
C) reduce the unemployment rate because they increase the net marginal product of labour. 
D) increase the unemployment rate by increasing the net marginal product of labour. 
E) increase the unemployment rate by increasing the number of spells of unemployment. 
A) reduce the unemployment rate because they boost worker morale. 
B) increase the unemployment rate by increasing the average duration of unemployment. 
C) reduce the unemployment rate because they increase the net marginal product of labour. 
D) increase the unemployment rate by increasing the net marginal product of labour. 
E) increase the unemployment rate by increasing the number of spells of unemployment.

Question 10

In the two-sided search model, if the cost of posting a vacancy rises for firms, then

Accepted Answer

A) labour market participation rises, unemployment rises, and vacancies fall. 
B) unemployment falls, vacancies fall, and output falls. 
C) labour market participation falls, unemployment rises, and output falls. 
D) labour market participation rises, vacancies fall, and unemployment rises. 
E) unemployment rises, vacancies rise, and output falls. 
A) labour market participation rises, unemployment rises, and vacancies fall. 
B) unemployment falls, vacancies fall, and output falls. 
C) labour market participation falls, unemployment rises, and output falls. 
D) labour market participation rises, vacancies fall, and unemployment rises. 
E) unemployment rises, vacancies rise, and output falls.

Question 11

In the one-sided search model, an increase in the separation rate

Accepted Answer

A) reduces wages. 
B) increases the welfare of an unemployed worker. 
C) increases the employment insurance benefit. 
D) reduces the welfare of an employed worker. 
E) results in fewer marriages. 
A) reduces wages. 
B) increases the welfare of an unemployed worker. 
C) increases the employment insurance benefit. 
D) reduces the welfare of an employed worker. 
E) results in fewer marriages.

Question 12

In the two-sided search model, the size of the labour force is positively related to

Accepted Answer

A) the ratio of males to females in the labour force. 
B) the population growth rate. 
C) the expected payoff to searching for work. 
D) the expected cost to searching for work. 
E) the benefits of non-participation. 
A) the ratio of males to females in the labour force. 
B) the population growth rate. 
C) the expected payoff to searching for work. 
D) the expected cost to searching for work. 
E) the benefits of non-participation.

Question 13

Labour market tightness in the two-sided search model is defined by

Accepted Answer

A) the number of firms divided by the number of consumers searching for work. 
B) the number of firms divided by the number of employed consumers. 
C) the number of firms multiplied by the number of consumers searching for work. 
D) the number of consumers searching for work divided by the number of firms. 
E) the number of employed consumers divided by the number of firms. 
A) the number of firms divided by the number of consumers searching for work. 
B) the number of firms divided by the number of employed consumers. 
C) the number of firms multiplied by the number of consumers searching for work. 
D) the number of consumers searching for work divided by the number of firms. 
E) the number of employed consumers divided by the number of firms.

Question 14

In equilibrium in the two-sided search model, aggregate output is given by

Accepted Answer

A)  $Y = \operatorname { Qem } ( 1 , j )$. 
B)  $Y = z F ( Q , N )$. 
C)  $Y = z \frac { Q } { A }$. 
D)  $Y = \operatorname { Qem } ( Q , A )$. 
E)  $Y = \operatorname { Qem } ( j , 1 )$. 
A)  $Y = \operatorname { Qem } ( 1 , j )$. 
B)  $Y = z F ( Q , N )$. 
C)  $Y = z \frac { Q } { A }$. 
D)  $Y = \operatorname { Qem } ( Q , A )$. 
E)  $Y = \operatorname { Qem } ( j , 1 )$.

Question 15

Which of the following is an assumption in the two-sided search model about the matching function?

Accepted Answer

A) The increase in matches from an increase in Q is decreasing in Q. 
B) The increase in matches from an increase in A is increasing in A. 
C) The increase in matches from an increase in Q is increasing in Q. 
D) The number of matches increases if Q increases but A decreases. 
E) The number of matches increases if Q or A decrease. 
A) The increase in matches from an increase in Q is decreasing in Q. 
B) The increase in matches from an increase in A is increasing in A. 
C) The increase in matches from an increase in Q is increasing in Q. 
D) The number of matches increases if Q increases but A decreases. 
E) The number of matches increases if Q or A decrease.

Question 16

Percentage deviations from trend in unemployment are

Accepted Answer

A) procyclical and have been smaller than the percentage deviations from trend in real GDP. 
B) procyclical and have been smaller than the percentage deviations from trend in labour force participation. 
C) procyclical and have been larger than the percentage deviations from trend in real GDP. 
D) countercyclical and have been larger than the percentage deviations from trend in real GDP. 
E) countercyclical and have been smaller than the percentage deviations from trend in real GDP. 
A) procyclical and have been smaller than the percentage deviations from trend in real GDP. 
B) procyclical and have been smaller than the percentage deviations from trend in labour force participation. 
C) procyclical and have been larger than the percentage deviations from trend in real GDP. 
D) countercyclical and have been larger than the percentage deviations from trend in real GDP. 
E) countercyclical and have been smaller than the percentage deviations from trend in real GDP.

Question 17

In the two-sided search model, Nash Bargaining implies

Accepted Answer

A) the firm and the worker receive a constant share of the surplus from a match. 
B) the firm and the worker reduce the total surplus to zero. 
C) the firm receives the total surplus from a match. 
D) the worker receives the total surplus from a match. 
E) the firm receives an increasing share of the surplus and the worker a decreasing share. 
A) the firm and the worker receive a constant share of the surplus from a match. 
B) the firm and the worker reduce the total surplus to zero. 
C) the firm receives the total surplus from a match. 
D) the worker receives the total surplus from a match. 
E) the firm receives an increasing share of the surplus and the worker a decreasing share.

Question 18

In the one-sided search model, if an unemployed worker turns down a job offer

Accepted Answer

A) he or she is not behaving optimally. 
B) he or she foregoes employment insurance. 
C) he or she would be deemed marginally attached to the labour force. 
D) he or she quits searching and drops out of the labour force. 
E) he or she continues to search. 
A) he or she is not behaving optimally. 
B) he or she foregoes employment insurance. 
C) he or she would be deemed marginally attached to the labour force. 
D) he or she quits searching and drops out of the labour force. 
E) he or she continues to search.

Question 19

The participation rate tends to be procyclical because

Accepted Answer

A) employment is procyclical. 
B) the size of the labour force is procyclical and the size of the total population is countercyclical. 
C) the sizes of both the labour force and the total population are procyclical. 
D) the size of the labour force is procyclical. 
E) the unemployment rate is countercyclical. 
A) employment is procyclical. 
B) the size of the labour force is procyclical and the size of the total population is countercyclical. 
C) the sizes of both the labour force and the total population are procyclical. 
D) the size of the labour force is procyclical. 
E) the unemployment rate is countercyclical.

Question 20

Which of the following statements is the most accurate concerning the behaviour of the unemployment rate in Canada?

Accepted Answer

A) Both the cyclical behaviour of the unemployment rate and the trend behaviour of the unemployment rate are well explained by demographic factors. 
B) Both the cyclical behaviour of the unemployment rate and the trend behaviour of the unemployment rate are well explained by changes in the level of aggregate economic
Activity. 
C) The cyclical behaviour of the unemployment rate is well explained by changes in the level of aggregate economic activity, and the trend behaviour of the unemployment rate is well
Explained by demographic factors. 
D) The cyclical behaviour of the unemployment rate is well explained by demographic factors, and the trend behaviour of the unemployment rate is well explained by changes in the level
Of aggregate economic activity. 
E) Both the cyclical behaviour of the unemployment rate and the trend behaviour of the unemployment rate are not well explained by demographic factors. 
A) Both the cyclical behaviour of the unemployment rate and the trend behaviour of the unemployment rate are well explained by demographic factors. 
B) Both the cyclical behaviour of the unemployment rate and the trend behaviour of the unemployment rate are well explained by changes in the level of aggregate economic
Activity. 
C) The cyclical behaviour of the unemployment rate is well explained by changes in the level of aggregate economic activity, and the trend behaviour of the unemployment rate is well
Explained by demographic factors. 
D) The cyclical behaviour of the unemployment rate is well explained by demographic factors, and the trend behaviour of the unemployment rate is well explained by changes in the level
Of aggregate economic activity. 
E) Both the cyclical behaviour of the unemployment rate and the trend behaviour of the unemployment rate are not well explained by demographic factors.

In the two-sided search model, the equilibrium effects of an increase in productivity are to

According to the two-sided search model, in equilibrium labour market tightness tends to be high when

In the two-sided search model, firms continue posting vacancies until the probability of matching with a worker is equal to

Since World War II, the participation rate

In the two-sided search model, an increase in productivity causes

According to the two-sided search model, in equilibrium the number of firms is

In equilibrium, an increase in Employment Insurance benefits

In the one-sided search model, the welfare of an unemployed worker

Government-sponsored Employment Insurance programs typically

In the two-sided search model, if the cost of posting a vacancy rises for firms, then

In the one-sided search model, an increase in the separation rate

In the two-sided search model, the size of the labour force is positively related to

Labour market tightness in the two-sided search model is defined by

In equilibrium in the two-sided search model, aggregate output is given by

Which of the following is an assumption in the two-sided search model about the matching function?

Percentage deviations from trend in unemployment are

In the two-sided search model, Nash Bargaining implies

In the one-sided search model, if an unemployed worker turns down a job offer

The participation rate tends to be procyclical because

Which of the following statements is the most accurate concerning the behaviour of the unemployment rate in Canada?

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: the Workleisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: the Consumptionsavings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model With Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models With Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: a Deeper Look

Filters

Exam 6: Search and Unemployment

In the two-sided search model, the equilibrium effects of an increase in productivity are to

According to the two-sided search model, in equilibrium labour market tightness tends to be high when

In the two-sided search model, firms continue posting vacancies until the probability of matching with a worker is equal to

Since World War II, the participation rate

In the two-sided search model, an increase in productivity causes

According to the two-sided search model, in equilibrium the number of firms is

In equilibrium, an increase in Employment Insurance benefits

In the one-sided search model, the welfare of an unemployed worker

Government-sponsored Employment Insurance programs typically

In the two-sided search model, if the cost of posting a vacancy rises for firms, then

In the one-sided search model, an increase in the separation rate

In the two-sided search model, the size of the labour force is positively related to

Labour market tightness in the two-sided search model is defined by

In equilibrium in the two-sided search model, aggregate output is given by

Which of the following is an assumption in the two-sided search model about the matching function?

Percentage deviations from trend in unemployment are

In the two-sided search model, Nash Bargaining implies

In the one-sided search model, if an unemployed worker turns down a job offer

The participation rate tends to be procyclical because

Which of the following statements is the most accurate concerning the behaviour of the unemployment rate in Canada?

Introduction

Measurement

Business Cycle Measurement

Consumer and Firm Behavior: the Workleisure Decision and Profit Maximization

A Closed-Economy One-Period Macroeconomic Model

Economic Growth: Malthus and Solow

Income Disparity Among Countries and Endogenous Growth

A Two-Period Model: the Consumptionsavings Decision and Credit Markets

Credit Market Imperfections: Credit Frictions, Financial Crises, and Social Security

A Real Intertemporal Model With Investment

Money, Banking, Prices, and Monetary Policy

Business Cycle Models With Flexible Prices and Wages

New Keynesian Economics: Sticky Prices

Inflation: Phillips Curves and Neo-Fisherism

International Trade in Goods and Assets

Money in the Open Economy

Money, Inflation, and Banking: a Deeper Look

Filters