Question 1

In the two-sided search model, an unemployed worker's chances of finding a job depend on

Accepted Answer

A) opportunities in other countries. 
B) his or her search effort. 
C) the reservation wage. 
D) labour market tightness. 
E) employment insurance benefits. 
A) opportunities in other countries. 
B) his or her search effort. 
C) the reservation wage. 
D) labour market tightness. 
E) employment insurance benefits.

Question 2

Constant returns to scale in the matching function means that, given any constant $x > 0$

Accepted Answer

A) $m ( x Q , x A ) > x m ( Q , A )$. B) $m ( x Q , x A ) < x m ( Q , A )$. C) $m ( x Q , x A ) = \mathrm { e } ^ { \mathrm { x } m } ( Q , A )$. D) $m ( x Q , x A ) = \frac { 1 } { x } m ( Q , A )$. E) $m ( x Q , x A ) = x m ( Q , A )$. A) $m ( x Q , x A ) > x m ( Q , A )$. B) $m ( x Q , x A ) < x m ( Q , A )$. C) $m ( x Q , x A ) = \mathrm { e } ^ { \mathrm { x } m } ( Q , A )$. D) $m ( x Q , x A ) = \frac { 1 } { x } m ( Q , A )$. E) $m ( x Q , x A ) = x m ( Q , A )$.

Question 3

In the two-sided search model, labour market tightness

Accepted Answer

A) is eliminated by employment insurance. 
B) is irrelevant for firms' decisions. 
C) is irrelevant for the labour force participation decision. 
D) reduces the reservation wage. 
E) affects the chances of finding a job. 
A) is eliminated by employment insurance. 
B) is irrelevant for firms' decisions. 
C) is irrelevant for the labour force participation decision. 
D) reduces the reservation wage. 
E) affects the chances of finding a job.

Question 4

The reservation wage

Accepted Answer

A) is the wage at which an unemployed worker is just indifferent to accepting a job and turning it down. 
B) is the wage paid to the reserve army of the unemployed. 
C) should be the same as the employment insurance benefit, if employment insurance is to be efficient. 
D) is the wage paid in the government sector. 
E) cannot be higher than the employment insurance benefit. 
A) is the wage at which an unemployed worker is just indifferent to accepting a job and turning it down. 
B) is the wage paid to the reserve army of the unemployed. 
C) should be the same as the employment insurance benefit, if employment insurance is to be efficient. 
D) is the wage paid in the government sector. 
E) cannot be higher than the employment insurance benefit.

Question 5

In the one-sided search model, if the job offer rate goes down

Accepted Answer

A) the reservation wage goes up and long-run unemployment goes down. 
B) the reservation wage goes down and the effect on long-run unemployment is ambiguous. 
C) the reservation wage goes up and long-run unemployment goes up. 
D) unemployed workers stop searching. 
E) the reservation wage and long-run unemployment are unchanged. 
A) the reservation wage goes up and long-run unemployment goes down. 
B) the reservation wage goes down and the effect on long-run unemployment is ambiguous. 
C) the reservation wage goes up and long-run unemployment goes up. 
D) unemployed workers stop searching. 
E) the reservation wage and long-run unemployment are unchanged.

Question 6

In the two-sided search model, an increase in matching efficiency, e, could help high unemployment when there is

Accepted Answer

A) demographic changes. 
B) high labour force participation. 
C) a large degree of mismatch. 
D) an increase in aggregate economic activity. 
E) low labour force participation. 
A) demographic changes. 
B) high labour force participation. 
C) a large degree of mismatch. 
D) an increase in aggregate economic activity. 
E) low labour force participation.

Question 7

In the two-sided search model, the expected payoff to searching for work

Accepted Answer

A) increases with the employment insurance benefit and decreases with the market wage. 
B) decreases with the employment insurance benefit and increases with the market wage. 
C) decreases with labour market tightness. 
D) depends on the reservation wage. 
E) increases with the employment insurance benefit and increases with the market wage. 
A) increases with the employment insurance benefit and decreases with the market wage. 
B) decreases with the employment insurance benefit and increases with the market wage. 
C) decreases with labour market tightness. 
D) depends on the reservation wage. 
E) increases with the employment insurance benefit and increases with the market wage.

Question 8

A good example of a sectoral shift would be the

Accepted Answer

A) expansion in the fraction of employees covered by Employment Insurance in Canada. 
B) decrease in the size of manufacturing employment relative to service sector employment in Canada. 
C) loss of total Canadian employment to Mexico. 
D) recent influx of immigrants to Canada. 
E) outsourcing of Canada's jobs to India. 
A) expansion in the fraction of employees covered by Employment Insurance in Canada. 
B) decrease in the size of manufacturing employment relative to service sector employment in Canada. 
C) loss of total Canadian employment to Mexico. 
D) recent influx of immigrants to Canada. 
E) outsourcing of Canada's jobs to India.

Question 9

In the one-sided search model, if the employment insurance benefit goes down

Accepted Answer

A) the labour theory of value comes into play. 
B) the government sector shrinks. 
C) the welfare of the unemployed goes up. 
D) the reservation wage goes up. 
E) the reservation wage goes down. 
A) the labour theory of value comes into play. 
B) the government sector shrinks. 
C) the welfare of the unemployed goes up. 
D) the reservation wage goes up. 
E) the reservation wage goes down.

Question 10

Since World War II, the participation rates

Accepted Answer

A) of men has increased and the participation rate of women has decreased. 
B) of both men and women have remained constant. 
C) of both men and women have increased. 
D) of both men and women have decreased. 
E) of women has increased and the participation rate of men has decreased. 
A) of men has increased and the participation rate of women has decreased. 
B) of both men and women have remained constant. 
C) of both men and women have increased. 
D) of both men and women have decreased. 
E) of women has increased and the participation rate of men has decreased.

Question 11

In the two-sided search model, an increase in Employment Insurance benefits makes labour search

Accepted Answer

A) unambiguously increase. 
B) equivalent to working. 
C) more attractive. 
D) unambiguously decrease. 
E) more difficult to monitor. 
A) unambiguously increase. 
B) equivalent to working. 
C) more attractive. 
D) unambiguously decrease. 
E) more difficult to monitor.

Question 12

In the two-sided search model, the choice that responds to economic conditions is

Accepted Answer

A) an unemployed worker's choice of the reservation wage. 
B) the government's choice of the employment insurance benefit. 
C) the Beveridge curve. 
D) an unemployed worker's choice of search effort. 
E) a firm's choice of how many vacancies to post. 
A) an unemployed worker's choice of the reservation wage. 
B) the government's choice of the employment insurance benefit. 
C) the Beveridge curve. 
D) an unemployed worker's choice of search effort. 
E) a firm's choice of how many vacancies to post.

Question 13

Let $N , Q$, and U denote, respectively, the working age population, the labour force, and the number of unemployed. The unemployment rate is defined as

Accepted Answer

A)  $\frac { Q } { U }$. 
B)  $\frac { N } { U }$. 
C)  $\frac { E } { Q }$. 
D)  $\frac { U } { Q }$. 
E)  $\frac { U } { N }$. 
A)  $\frac { Q } { U }$. 
B)  $\frac { N } { U }$. 
C)  $\frac { E } { Q }$. 
D)  $\frac { U } { Q }$. 
E)  $\frac { U } { N }$.

Question 14

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

Accepted Answer

A)  shifts $v ( Q )$ up, increasing $Q$ and decreasing $j$. 
B)  shifts $v ( Q )$ down, increasing $Q$ and $j$. 
C)  shifts $v ( Q )$ down, decreasing $Q$ and increasing $j$. 
D)  shifts $v ( Q )$ up, increasing $Q$ and $j$. 
E)  shifts $v ( Q )$ up, decreasing $Q$ and $j$. 
A)  shifts $v ( Q )$ up, increasing $Q$ and decreasing $j$. 
B)  shifts $v ( Q )$ down, increasing $Q$ and $j$. 
C)  shifts $v ( Q )$ down, decreasing $Q$ and increasing $j$. 
D)  shifts $v ( Q )$ up, increasing $Q$ and $j$. 
E)  shifts $v ( Q )$ up, decreasing $Q$ and $j$.

Question 15

Sectoral shifts influences the unemployment rate through

Accepted Answer

A) a shift away from services industries and toward manufacturing industries. 
B) a shift away from manufacturing industries and toward services industries. 
C) a shift away from agriculture and toward oil and gas production. 
D) a shift way from white collar jobs and toward blue collar jobs. 
E) a shift away from blue collar jobs and toward services industries. 
A) a shift away from services industries and toward manufacturing industries. 
B) a shift away from manufacturing industries and toward services industries. 
C) a shift away from agriculture and toward oil and gas production. 
D) a shift way from white collar jobs and toward blue collar jobs. 
E) a shift away from blue collar jobs and toward services industries.

Question 16

Let $N , Q$, and $U$ denote, respectively, the working age population, the labour force, and the number of unemployed. The participation rate is defined as

Accepted Answer

A)  $\frac { Q } { U }$. 
B)  $\frac { Q } { N }$. 
C)  $\frac { E } { Q }$. 
D)  $\frac { U } { Q }$. 
E)  $\frac { N } { U }$. 
A)  $\frac { Q } { U }$. 
B)  $\frac { Q } { N }$. 
C)  $\frac { E } { Q }$. 
D)  $\frac { U } { Q }$. 
E)  $\frac { N } { U }$.

Question 17

The two-sided search model is consistent with which of the following business cycle facts?

Accepted Answer

A) The unemployment rate is countercyclical and the vacancy rate is acyclical. 
B) The unemployment rate is countercyclical and the vacancy rate is countercyclical. 
C) The unemployment rate is countercyclical and the vacancy rate is procyclical. 
D) The unemployment rate is acyclical and the vacancy rate is procyclical. 
E) The unemployment rate is procyclical and the vacancy rate is procyclical. 
A) The unemployment rate is countercyclical and the vacancy rate is acyclical. 
B) The unemployment rate is countercyclical and the vacancy rate is countercyclical. 
C) The unemployment rate is countercyclical and the vacancy rate is procyclical. 
D) The unemployment rate is acyclical and the vacancy rate is procyclical. 
E) The unemployment rate is procyclical and the vacancy rate is procyclical.

Question 18

In equilibrium in the two-sided search model, labour force participation is

Accepted Answer

A) not dependent on market tightness. 
B) decreasing with increases in the benefits from searching. 
C) the ratio of market tightness to the cost of a vacancy. 
D) increasing in market tightness. 
E) decreasing in market tightness. 
A) not dependent on market tightness. 
B) decreasing with increases in the benefits from searching. 
C) the ratio of market tightness to the cost of a vacancy. 
D) increasing in market tightness. 
E) decreasing in market tightness.

Question 19

A key determinant of the unemployment rate is

Accepted Answer

A) aggregate consumption. 
B) aggregate economic activity. 
C) labour market unrest. 
D) nominal interest rates. 
E) the participation rate. 
A) aggregate consumption. 
B) aggregate economic activity. 
C) labour market unrest. 
D) nominal interest rates. 
E) the participation rate.

Question 20

In the two-sided search model, there

Accepted Answer

A) are N total consumers and N total firms. 
B) is an exogenously fixed number of firms. 
C) are only employed and unemployed consumers. 
D) is a single representative agent. 
E) are N total consumers. 
A) are N total consumers and N total firms. 
B) is an exogenously fixed number of firms. 
C) are only employed and unemployed consumers. 
D) is a single representative agent. 
E) are N total consumers.

In the two-sided search model, an unemployed worker's chances of finding a job depend on

Constant returns to scale in the matching function means that, given any constant $x > 0$

In the two-sided search model, labour market tightness

The reservation wage

In the one-sided search model, if the job offer rate goes down

In the two-sided search model, an increase in matching efficiency, e, could help high unemployment when there is

In the two-sided search model, the expected payoff to searching for work

A good example of a sectoral shift would be the

In the one-sided search model, if the employment insurance benefit goes down

Since World War II, the participation rates

In the two-sided search model, an increase in Employment Insurance benefits makes labour search

In the two-sided search model, the choice that responds to economic conditions is

Let $N , Q$ , and U denote, respectively, the working age population, the labour force, and the number of unemployed. The unemployment rate is defined as

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

Sectoral shifts influences the unemployment rate through

Let $N , Q$ , and $U$ denote, respectively, the working age population, the labour force, and the number of unemployed. The participation rate is defined as

The two-sided search model is consistent with which of the following business cycle facts?

In equilibrium in the two-sided search model, labour force participation is

A key determinant of the unemployment rate is

In the two-sided search model, there

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, an unemployed worker's chances of finding a job depend on

Constant returns to scale in the matching function means that, given any constant x>0x > 0x>0

In the two-sided search model, labour market tightness

The reservation wage

In the one-sided search model, if the job offer rate goes down

In the two-sided search model, an increase in matching efficiency, e, could help high unemployment when there is

In the two-sided search model, the expected payoff to searching for work

A good example of a sectoral shift would be the

In the one-sided search model, if the employment insurance benefit goes down

Since World War II, the participation rates

In the two-sided search model, an increase in Employment Insurance benefits makes labour search

In the two-sided search model, the choice that responds to economic conditions is

Let N,QN , QN,Q , and U denote, respectively, the working age population, the labour force, and the number of unemployed. The unemployment rate is defined as

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

Sectoral shifts influences the unemployment rate through

Let N,QN , QN,Q , and UUU denote, respectively, the working age population, the labour force, and the number of unemployed. The participation rate is defined as

The two-sided search model is consistent with which of the following business cycle facts?

In equilibrium in the two-sided search model, labour force participation is

A key determinant of the unemployment rate is

In the two-sided search model, there

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

Constant returns to scale in the matching function means that, given any constant $x > 0$

Let $N , Q$ , and U denote, respectively, the working age population, the labour force, and the number of unemployed. The unemployment rate is defined as

Let $N , Q$ , and $U$ denote, respectively, the working age population, the labour force, and the number of unemployed. The participation rate is defined as