Question 1

Job search is defined as

Accepted Answer

A)  the activity of looking for an acceptable, vacant job. 
B)  saying you are looking for a job when you are actually not looking. 
C)  attending school to increase your employability. 
D)  equivalent to job rationing. 
E)  being paid an efficiency wage. 
A)  the activity of looking for an acceptable, vacant job. 
B)  saying you are looking for a job when you are actually not looking. 
C)  attending school to increase your employability. 
D)  equivalent to job rationing. 
E)  being paid an efficiency wage.

Question 2

The level of real GDP the economy produces at full employment is

Accepted Answer

A)  an unattainable level. 
B)  potential GDP. 
C)  never reached in reality. 
D)  called the Lucas level. 
E)  the maximum amount of GDP that can ever be produced. 
A)  an unattainable level. 
B)  potential GDP. 
C)  never reached in reality. 
D)  called the Lucas level. 
E)  the maximum amount of GDP that can ever be produced.

Question 3

When all other influences on work plans remain the same, the

Accepted Answer

A)  lower the real wage rate, the smaller the quantity of labor supplied. 
B)  higher the real wage rate, the greater the quantity of labor demanded. 
C)  lower the real wage rate, the greater the quantity of labor supplied. 
D)  lower the real wage rate, the smaller the quantity of labor demanded. 
E)  lower the real wage rate, the larger the labor force participation. 
A)  lower the real wage rate, the smaller the quantity of labor supplied. 
B)  higher the real wage rate, the greater the quantity of labor demanded. 
C)  lower the real wage rate, the greater the quantity of labor supplied. 
D)  lower the real wage rate, the smaller the quantity of labor demanded. 
E)  lower the real wage rate, the larger the labor force participation.

Question 4

Briefly define real and potential GDP, and explain the relationship between real GDP and potential GDP.How can we measure potential GDP?

Accepted Answer

Real GDP is the actual level of GDP, adj

Question 5

-The figure above shows the U.S.demand for labor curve.If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level, there will be a

Accepted Answer

A)  rightward shift of the demand for labor curve. 
B)  leftward shift of the demand for labor curve. 
C)  movement downward along the demand for labor curve from a point such as A to a point such as B. 
D)  movement upward along the demand for labor curve from a point such as C to a point such as B. 
E)  None of the above answers is correct because there is no change in the demand for labor curve. 
A)  rightward shift of the demand for labor curve. 
B)  leftward shift of the demand for labor curve. 
C)  movement downward along the demand for labor curve from a point such as A to a point such as B. 
D)  movement upward along the demand for labor curve from a point such as C to a point such as B. 
E)  None of the above answers is correct because there is no change in the demand for labor curve.

Question 6

Which of the following creates job rationing?

Accepted Answer

A)  The real wage rate is below the equilibrium level. 
B)  The real wage rate is above the equilibrium level. 
C)  The real wage rate is equal to the equilibrium level. 
D)  Job search decreases. 
E)  An increase in unemployment benefits. 
A)  The real wage rate is below the equilibrium level. 
B)  The real wage rate is above the equilibrium level. 
C)  The real wage rate is equal to the equilibrium level. 
D)  Job search decreases. 
E)  An increase in unemployment benefits.

Question 7

The total labor hours that all the firms in the economy plan to hire during a given time period at one particular real wage rate is the

Accepted Answer

A)  demand for labor. 
B)  quantity of labor demanded. 
C)  supply of labor. 
D)  quantity of labor supplied. 
E)  quantity of jobs supplied. 
A)  demand for labor. 
B)  quantity of labor demanded. 
C)  supply of labor. 
D)  quantity of labor supplied. 
E)  quantity of jobs supplied.

Question 8

An efficiency wage is designed to ________ work effort and to ________ labor turnover.

Accepted Answer

A)  decrease; lower 
B)  decrease; raise 
C)  increase; raise 
D)  increase; lower 
E)  not change; decrease 
A)  decrease; lower 
B)  decrease; raise 
C)  increase; raise 
D)  increase; lower 
E)  not change; decrease

Question 9

Intel wants to attract the most productive and knowledgeable workers.To achieve this goal it could pay ________ wage.

Accepted Answer

A)  an efficiency 
B)  a minimum 
C)  a nominal 
D)  an equilibrium 
E)  a Lucas wedge 
A)  an efficiency 
B)  a minimum 
C)  a nominal 
D)  an equilibrium 
E)  a Lucas wedge

Question 10

Suppose the price of a product is $4 and the nominal wage that the firm must pay is $20.Then the firm's real wage is

Accepted Answer

A)  $20. 
B)  $80. 
C)  $5. 
D)  $0.20 
E)  $4. 
A)  $20. 
B)  $80. 
C)  $5. 
D)  $0.20 
E)  $4.

Question 11

Suppose job search has decreased over the last several years. This decrease could be a result of i) a change in unemployment benefits
Ii) a positive structural change
Iii) a higher inflation rate

Accepted Answer

A)  ii only. 
B)  i only. 
C)  i and ii. 
D)  ii and iii. 
E)  i and iii. 
A)  ii only. 
B)  i only. 
C)  i and ii. 
D)  ii and iii. 
E)  i and iii.

Question 12

The gap in potential GDP in the United States versus Europe can be explained by

Accepted Answer

A)  the fact that U.S.labor is more productive than European labor. 
B)  prices are higher in the United States. 
C)  the Okun Gap is larger in the United States. 
D)  the fact that income taxes are higher in the United States. 
E)  equilibrium employment is higher in Europe. 
A)  the fact that U.S.labor is more productive than European labor. 
B)  prices are higher in the United States. 
C)  the Okun Gap is larger in the United States. 
D)  the fact that income taxes are higher in the United States. 
E)  equilibrium employment is higher in Europe.

Question 13

The minimum wage is a

Accepted Answer

A)  possible cause of job search because it lowers wages below their equilibrium. 
B)  possible cause of job rationing because it lowers wages below their equilibrium. 
C)  government established highest wage that is legal to pay. 
D)  possible cause of job rationing because it raises wages above their equilibrium. 
E)  factor that decreases unemployment because fewer people search for work if the minimum wage is increased. 
A)  possible cause of job search because it lowers wages below their equilibrium. 
B)  possible cause of job rationing because it lowers wages below their equilibrium. 
C)  government established highest wage that is legal to pay. 
D)  possible cause of job rationing because it raises wages above their equilibrium. 
E)  factor that decreases unemployment because fewer people search for work if the minimum wage is increased.

Question 14

Collective bargaining by unions can result in a union wage rate that is ________ the equilibrium real wage rate and creates a ________ of labor.

Accepted Answer

A)  above; surplus 
B)  above; shortage 
C)  below; surplus 
D)  below; shortage 
E)  equal to; surplus 
A)  above; surplus 
B)  above; shortage 
C)  below; surplus 
D)  below; shortage 
E)  equal to; surplus

Question 15

During a business cycle recession, it is very likely that real GDP will

Accepted Answer

A)  exceed nominal GDP. 
B)  be less than potential GDP. 
C)  equal nominal GDP but not equal potential GDP. 
D)  equal nominal GDP and equal potential GDP. 
E)  be greater than potential GDP. 
A)  exceed nominal GDP. 
B)  be less than potential GDP. 
C)  equal nominal GDP but not equal potential GDP. 
D)  equal nominal GDP and equal potential GDP. 
E)  be greater than potential GDP.

Question 16

The presence of efficiency, minimum and union wages

Accepted Answer

A)  can explain job rationing because they lower the natural unemployment rate. 
B)  can explain job rationing because they raise the real wage rate above equilibrium. 
C)  can explain job rationing because they lower the real wage rate below equilibrium. 
D)  does not effect job rationing because they affect only the amount of job search. 
E)  cannot explain job rationing because they are a natural part of the economy. 
A)  can explain job rationing because they lower the natural unemployment rate. 
B)  can explain job rationing because they raise the real wage rate above equilibrium. 
C)  can explain job rationing because they lower the real wage rate below equilibrium. 
D)  does not effect job rationing because they affect only the amount of job search. 
E)  cannot explain job rationing because they are a natural part of the economy.

Question 17

A surplus in the labor market indicates that the

Accepted Answer

A)  real wage rate is above the equilibrium wage rate but it is too low to eliminate the surplus of labor. 
B)  quantity of labor demanded is less than the quantity of labor supplied. 
C)  real wage rate has to rise before the labor market will reach equilibrium. 
D)  workers are not looking for work because they enjoy their leisure time. 
E)  real wage rate is less than the equilibrium wage rate. 
A)  real wage rate is above the equilibrium wage rate but it is too low to eliminate the surplus of labor. 
B)  quantity of labor demanded is less than the quantity of labor supplied. 
C)  real wage rate has to rise before the labor market will reach equilibrium. 
D)  workers are not looking for work because they enjoy their leisure time. 
E)  real wage rate is less than the equilibrium wage rate.

Question 18

The Bubby Gum factory produces bubble gum.Joanne is one of the employees, and she produce 10 packs of bubble gum per hour.Joanne's money wage rate is $12 per hour.Based on this information, the Bubby Gum company should

Accepted Answer

A)  keep Joanne because she creates a profit for the firm. 
B)  fire Joanne because she creates a loss for the firm. 
C)  decrease Joanne's wage rate because she is paid too much. 
D)  increase its demand for labor. 
E)  None of the above answers are correct because more information about Joanne's real wage is needed to decide what to do with Joanne. 
A)  keep Joanne because she creates a profit for the firm. 
B)  fire Joanne because she creates a loss for the firm. 
C)  decrease Joanne's wage rate because she is paid too much. 
D)  increase its demand for labor. 
E)  None of the above answers are correct because more information about Joanne's real wage is needed to decide what to do with Joanne.

Question 19

Explain how the labor market and the production function determine potential GDP.

Accepted Answer

The labor market determines the equilibr

Question 20

What factors can lead the real wage rate to be above its full-employment equilibrium level?

Accepted Answer

There are at least three reasons why the

Job search is defined as

The level of real GDP the economy produces at full employment is

When all other influences on work plans remain the same, the

Briefly define real and potential GDP, and explain the relationship between real GDP and potential GDP.How can we measure potential GDP?

-The figure above shows the U.S.demand for labor curve.If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level, there will be a

Which of the following creates job rationing?

The total labor hours that all the firms in the economy plan to hire during a given time period at one particular real wage rate is the

An efficiency wage is designed to work effort and to labor turnover.

Intel wants to attract the most productive and knowledgeable workers.To achieve this goal it could pay ________ wage.

Suppose the price of a product is $4 and the nominal wage that the firm must pay is $20.Then the firm's real wage is

Suppose job search has decreased over the last several years. This decrease could be a result of i) a change in unemployment benefits Ii) a positive structural change Iii) a higher inflation rate

The gap in potential GDP in the United States versus Europe can be explained by

The minimum wage is a

Collective bargaining by unions can result in a union wage rate that is the equilibrium real wage rate and creates a of labor.

During a business cycle recession, it is very likely that real GDP will

The presence of efficiency, minimum and union wages

A surplus in the labor market indicates that the

The Bubby Gum factory produces bubble gum.Joanne is one of the employees, and she produce 10 packs of bubble gum per hour.Joanne's money wage rate is $12 per hour.Based on this information, the Bubby Gum company should

Explain how the labor market and the production function determine potential GDP.

What factors can lead the real wage rate to be above its full-employment equilibrium level?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

Exam 8: Potential Gdp and the Natural Unemployment Rate

Job search is defined as

The level of real GDP the economy produces at full employment is

When all other influences on work plans remain the same, the

Briefly define real and potential GDP, and explain the relationship between real GDP and potential GDP.How can we measure potential GDP?

-The figure above shows the U.S.demand for labor curve.If there is a simultaneous increase in the nominal wage rate of 10 percent and a 10 percent increase in the price level, there will be a

Which of the following creates job rationing?

The total labor hours that all the firms in the economy plan to hire during a given time period at one particular real wage rate is the

An efficiency wage is designed to ________ work effort and to ________ labor turnover.

Intel wants to attract the most productive and knowledgeable workers.To achieve this goal it could pay ________ wage.

Suppose the price of a product is $4 and the nominal wage that the firm must pay is $20.Then the firm's real wage is

Suppose job search has decreased over the last several years. This decrease could be a result of i) a change in unemployment benefits Ii) a positive structural change Iii) a higher inflation rate

The gap in potential GDP in the United States versus Europe can be explained by

The minimum wage is a

Collective bargaining by unions can result in a union wage rate that is ________ the equilibrium real wage rate and creates a ________ of labor.

During a business cycle recession, it is very likely that real GDP will

The presence of efficiency, minimum and union wages

A surplus in the labor market indicates that the

The Bubby Gum factory produces bubble gum.Joanne is one of the employees, and she produce 10 packs of bubble gum per hour.Joanne's money wage rate is $12 per hour.Based on this information, the Bubby Gum company should

Explain how the labor market and the production function determine potential GDP.

What factors can lead the real wage rate to be above its full-employment equilibrium level?

Getting Started

The Usand Global Economies

The Economic Problem

Demand and Supply

Gdp: a Measure of Total Production and Income

Jobs and Unemployment

The Cpi and the Cost of Living

Economic Growth

Finance, Saving, and Investment

The Monetary System

Money, Interest, and Inflation

Aggregate Supply and Aggregate Demand

Aggregate Expenditure Multiplier

The Short-Run Policy Tradeoff

Fiscal Policy

Monetary Policy

International Trade Policy

International Finance

Filters

An efficiency wage is designed to work effort and to labor turnover.

Collective bargaining by unions can result in a union wage rate that is the equilibrium real wage rate and creates a of labor.