Exam 9: Unemployment and Its Natural Rate

About one-half of all spells of unemployment end when the unemployed person leaves the labour force.

If an unemployed person quits looking for work, ceteris paribus, which of the following best describes the changes in the labour statistics?

Table 28-1. This table shows the 2007 data for males and females aged 15 and over in the country of Dan. -Refer to Table 28-1. What is the adult female labour-force participation rate in Dan?

How is the number of long-term unemployment spells compared to short-term spells in Canadian economy?

According to efficiency wage theory, which of the following is a way to increase employees' work effort?

Cyclical unemployment and the natural rate of unemployment are sometimes hard to distinguish from each other, so economists are not very confident about estimates of the natural rate of unemployment. Still, since unemployment rates are consistently higher in Canada and most Western European countries than in the United States, it appears that the natural rate of unemployment is lower in the United States. What might explain this difference?

A minimum wage above equilibrium creates a labour surplus.

Figure 28-2 -Refer to Figure 28-2. If the minimum wage rose from $6 to $7, what would happen to unemployment?

Between 2006 and 2007, the country of Aquilonia reported an increase in the number of people who were employed. It also reported an increase in the unemployment rate. Which of the following would best explain the two reports?

Unemployment due to job search is best classified as structural unemployment.

Table 28-1. This table shows the 2007 data for males and females aged 15 and over in the country of Dan. -Refer to Table 28-1. What is the adult female population in Dan?

Union workers earn about 10 percent to 20 percent more than similar workers who do not belong to unions.

Even though the difference in labour-force participation rates of males and females has narrowed, the participation rate of males remains higher.

Which of the following groups has the highest labour-force participation rate in Canada?

Table 28-1. This table shows the 2007 data for males and females aged 15 and over in the country of Dan. -Refer to Table 28-1.What is the adult female labour force in Dan?

Firms might offer efficiency wages in order to attract a better pool of applicants.

Meredith is looking for work as a computer programmer. Although her prospects are good, she hasn't yet taken a job. Julie is looking for work in a steel mill, but there aren't many job ads for steel workers and every time she shows up for an interview, there are many more people than openings. Which of the following best describes the nature of these persons' unemployment?

In a labour demand and supply diagram, show the effects of the following events. In each case, discuss the changes in the equilibrium wage and employment. a.An increase in the wage income tax. b.A new trade agreement that allows for foreign competition in Canadian food sector. (Hint: consider how the elasticity of demand for food changes, then how does that affect the elasticity of demand for labour in the food sector.)

How is the labour-force participation rate defined?

What is a rough estimate of the natural rate of unemployment?