Question 1

Fiscal policy to combat demand-deficient unemployment is an attempt to:

Accepted Answer

A) increase aggregate demand so that it intersects aggregate supply at the full-employment level of output 
B) decrease aggregate demand so that it intersects aggregate supply at the full-employment level of output 
C) increase the money supply by a constant 4% annual rate 
D) decrease aggregate supply such that it intersects aggregate demand at the full-employment level of output 
A) increase aggregate demand so that it intersects aggregate supply at the full-employment level of output 
B) decrease aggregate demand so that it intersects aggregate supply at the full-employment level of output 
C) increase the money supply by a constant 4% annual rate 
D) decrease aggregate supply such that it intersects aggregate demand at the full-employment level of output

Question 2

Compared to the 1960s,the natural rate of unemployment in the 1970s and 1980s was:

Accepted Answer

A) higher,because of changes in the composition of the labor force 
B) higher,because of the failure of public policies to reduce it 
C) lower,because of changes in the composition of the labor force 
D) lower,because of the success of public policies to reduce it 
A) higher,because of changes in the composition of the labor force 
B) higher,because of the failure of public policies to reduce it 
C) lower,because of changes in the composition of the labor force 
D) lower,because of the success of public policies to reduce it

Question 3

The term natural rate of unemployment refers to the unemployment rate that will occur:

Accepted Answer

A) whenever the actual rate of inflation exceeds the actual rate 
B) if the actual rate of inflation is zero 
C) if the expected rate of inflation is zero 
D) in the long run if the actual rate of inflation equals the expected rate 
A) whenever the actual rate of inflation exceeds the actual rate 
B) if the actual rate of inflation is zero 
C) if the expected rate of inflation is zero 
D) in the long run if the actual rate of inflation equals the expected rate

Question 4

refer to the following diagram:
 
-If flow 4 increases and flows 3 and 5 both decrease,then the unemployment rate will:

Accepted Answer

A) rise 
B) fall 
C) stay the same 
D) change,but it cannot be determined how 
A) rise 
B) fall 
C) stay the same 
D) change,but it cannot be determined how

Question 5

Which of the following is a form of frictional unemployment?

Accepted Answer

A) Wait unemployment 
B) Structural unemployment 
C) Cyclical unemployment 
D) Displaced workers 
A) Wait unemployment 
B) Structural unemployment 
C) Cyclical unemployment 
D) Displaced workers

Question 6

Suppose that a policy response to cyclical unemployment is mistimed or overshoots its target,resulting in output above the full-employment level.Output will:

Accepted Answer

A) eventually return to the full-employment level because at some point,workers will no longer continue to supply as much labor at each nominal wage 
B) eventually return to the full-employment level because nominal wage rates are rigid 
C) eventually return to the full-employment level because workers will not adjust their acceptance wages 
D) stay above the full-employment level until corrective policy action is taken 
A) eventually return to the full-employment level because at some point,workers will no longer continue to supply as much labor at each nominal wage 
B) eventually return to the full-employment level because nominal wage rates are rigid 
C) eventually return to the full-employment level because workers will not adjust their acceptance wages 
D) stay above the full-employment level until corrective policy action is taken

Question 7

If a drop in aggregate demand causes a recession,then over this range of real output the aggregate supply curve is:

Accepted Answer

A) vertical 
B) downward sloping 
C) upward sloping 
D) inelastic 
A) vertical 
B) downward sloping 
C) upward sloping 
D) inelastic

Question 8

In the short run,the aggregate quantity supplied may exceed the full-employment level of output.This is because as the price level rises:

Accepted Answer

A) firms mistake lower real wage rates for lower money wage rates and therefore increase employment beyond the profit-maximizing level 
B) firms mistake lower money wage rates for lower real wage rates and therefore increase employment beyond the profit-maximizing level 
C) workers respond to falling real wage rates by working more hours,since the income effect outweighs the substitution effect 
D) unemployed workers mistake higher nominal wage rates for higher real wage rates,causing employment and output to rise as they accept job offers more quickly 
A) firms mistake lower real wage rates for lower money wage rates and therefore increase employment beyond the profit-maximizing level 
B) firms mistake lower money wage rates for lower real wage rates and therefore increase employment beyond the profit-maximizing level 
C) workers respond to falling real wage rates by working more hours,since the income effect outweighs the substitution effect 
D) unemployed workers mistake higher nominal wage rates for higher real wage rates,causing employment and output to rise as they accept job offers more quickly

Question 9

refer to the following diagram:
 
-If flow 2 increases,then the unemployment rate will go _____; if flow 6 decreases,then the unemployment rate will go _____.

Accepted Answer

A) up; up 
B) up; down 
C) down; up 
D) down; down 
A) up; up 
B) up; down 
C) down; up 
D) down; down

Question 10

refer to the following diagram:
 
-An increase in the unemployment rate may be caused by a(n):

Accepted Answer

A) increase in flow 1 
B) increase in flow 2 
C) decrease in flow 5 
D) increase in flow 6 
A) increase in flow 1 
B) increase in flow 2 
C) decrease in flow 5 
D) increase in flow 6

Question 11

Wages may be inflexible downward during a period of cyclical unemployment because:

Accepted Answer

A) insiders may fear harassment from outsiders who "stole" their jobs 
B) outsiders may fear harassment from insiders and are thus unwilling to work for lower wages 
C) firms believe that outsiders will withhold cooperation from insiders who "stole" their jobs 
D) both insiders and outsiders will withhold cooperation from management if management reduces wages 
A) insiders may fear harassment from outsiders who "stole" their jobs 
B) outsiders may fear harassment from insiders and are thus unwilling to work for lower wages 
C) firms believe that outsiders will withhold cooperation from insiders who "stole" their jobs 
D) both insiders and outsiders will withhold cooperation from management if management reduces wages

Question 12

To determine the unemployment rate,each month the government:

Accepted Answer

A) collects data from a survey of about 60,000 households nationwide 
B) collects data from a survey of about 500,000 firms nationwide 
C) records the number of people receiving unemployment compensation 
D) conducts a full count of the number of unemployed in each state 
A) collects data from a survey of about 60,000 households nationwide 
B) collects data from a survey of about 500,000 firms nationwide 
C) records the number of people receiving unemployment compensation 
D) conducts a full count of the number of unemployed in each state

Fiscal policy to combat demand-deficient unemployment is an attempt to:

Compared to the 1960s,the natural rate of unemployment in the 1970s and 1980s was:

The term natural rate of unemployment refers to the unemployment rate that will occur:

refer to the following diagram: -If flow 4 increases and flows 3 and 5 both decrease,then the unemployment rate will:

Which of the following is a form of frictional unemployment?

Suppose that a policy response to cyclical unemployment is mistimed or overshoots its target,resulting in output above the full-employment level.Output will:

If a drop in aggregate demand causes a recession,then over this range of real output the aggregate supply curve is:

In the short run,the aggregate quantity supplied may exceed the full-employment level of output.This is because as the price level rises:

refer to the following diagram: -If flow 2 increases,then the unemployment rate will go _; if flow 6 decreases,then the unemployment rate will go _.

refer to the following diagram: -An increase in the unemployment rate may be caused by a(n):

Wages may be inflexible downward during a period of cyclical unemployment because:

To determine the unemployment rate,each month the government:

Labor Economics: Introduction and Overview

The Theory of Individual Labor Supply

Population, Participation Rates, and Hours of Work

Labor Quality: Investing in Human Capital

The Demand for Labor

Wage Determination and the Allocation of Labor

Alternative Pay Schemes and Labor Efficiency

The Wage Structure

Mobility,Migration,and Efficiency

Labor Unions and Collective Bargaining

The Economic Impact of Unions

Government and the Labor Market: Employment, Expenditures, and Taxation

Government and the Labor Market: Legislation and Regulation

Labor Market Discrimination

Job Search: External and Internal

The Distribution of Personal Earnings

Labor Productivity: Wages,Prices,and Employment

Filters

Exam 18: Employment and Unemployment

Fiscal policy to combat demand-deficient unemployment is an attempt to:

Compared to the 1960s,the natural rate of unemployment in the 1970s and 1980s was:

The term natural rate of unemployment refers to the unemployment rate that will occur:

refer to the following diagram: -If flow 4 increases and flows 3 and 5 both decrease,then the unemployment rate will:

Which of the following is a form of frictional unemployment?

Suppose that a policy response to cyclical unemployment is mistimed or overshoots its target,resulting in output above the full-employment level.Output will:

If a drop in aggregate demand causes a recession,then over this range of real output the aggregate supply curve is:

In the short run,the aggregate quantity supplied may exceed the full-employment level of output.This is because as the price level rises:

refer to the following diagram: -If flow 2 increases,then the unemployment rate will go _____; if flow 6 decreases,then the unemployment rate will go _____.

refer to the following diagram: -An increase in the unemployment rate may be caused by a(n):

Wages may be inflexible downward during a period of cyclical unemployment because:

To determine the unemployment rate,each month the government:

Labor Economics: Introduction and Overview

The Theory of Individual Labor Supply

Population, Participation Rates, and Hours of Work

Labor Quality: Investing in Human Capital

The Demand for Labor

Wage Determination and the Allocation of Labor

Alternative Pay Schemes and Labor Efficiency

The Wage Structure

Mobility,Migration,and Efficiency

Labor Unions and Collective Bargaining

The Economic Impact of Unions

Government and the Labor Market: Employment, Expenditures, and Taxation

Government and the Labor Market: Legislation and Regulation

Labor Market Discrimination

Job Search: External and Internal

The Distribution of Personal Earnings

Labor Productivity: Wages,Prices,and Employment

Filters

refer to the following diagram: -If flow 2 increases,then the unemployment rate will go _; if flow 6 decreases,then the unemployment rate will go _.