Question 1

The natural rate of unemployment

Accepted Answer

A)  is currently about 4%. 
B)  must be the same for every demographic group. 
C)  occurs when job vacancies equal the number of unemployed workers. 
D)  hit bottom in the 1970s. 
A)  is currently about 4%. 
B)  must be the same for every demographic group. 
C)  occurs when job vacancies equal the number of unemployed workers. 
D)  hit bottom in the 1970s. C

Question 2

How is unemployment defined in the United States? How is the number of unemployed counted in the United States? What is the unemployment rate?

Accepted Answer

The U.S.Department of Labor considers an individual to be unemployed if the individual is on temporary layoff from their job waiting to be called back to work or if an individual has actively searched for work in the last month.The unemployed are counted each month by the Current Population Survey.The unemployment rate is obtained by taking the ratio of the unemployed to the total labor force (which is the sum of the number employed and the number unemployed).

Question 3

In the face of declining demand,unions usually tend to favor laying off workers rather than lowering wages.Which of these factors would not explain why this occurs?

Accepted Answer

A)  Workers with less seniority are laid off first. 
B)  Union leaders are elected by majority vote. 
C)  Lay-offs usually only affect a small fraction of the work force. 
D)  Most union members are willing to lose their jobs rather than accept even a small cut in wages. 
A)  Workers with less seniority are laid off first. 
B)  Union leaders are elected by majority vote. 
C)  Lay-offs usually only affect a small fraction of the work force. 
D)  Most union members are willing to lose their jobs rather than accept even a small cut in wages. D

Question 4

A worker who is laid off because his or her company chooses to move from Wisconsin to North Carolina is counted as ________ unemployment.

Accepted Answer

A)  frictional 
B)  wait 
C)  structural 
D)  cyclical 
A)  frictional 
B)  wait 
C)  structural 
D)  cyclical

Question 5

Advance notice of lay-offs should help to reduce

Accepted Answer

A)  frictional unemployment. 
B)  structural unemployment. 
C)  cyclical unemployment and frictional unemployment. 
D)  frictional unemployment and structural unemployment. 
A)  frictional unemployment. 
B)  structural unemployment. 
C)  cyclical unemployment and frictional unemployment. 
D)  frictional unemployment and structural unemployment.

Question 6

If Ajax Incorporated is a very unstable employer that frequently lays off workers,it will prefer to locate its plants in states

Accepted Answer

A)  with perfect experience rating of unemployment insurance tax rates. 
B)  with imperfect experience rating such that once its layoffs increase beyond a certain level, it does not have to pay a higher unemployment insurance tax rate. 
C)  with imperfect experience rating such that once its layoffs fall below a certain level, it pays the same minimum unemployment insurance tax rate. 
D)  with imperfect experience rating such that above a certain level, the unemployment tax rate increases more than in proportion to layoffs. 
A)  with perfect experience rating of unemployment insurance tax rates. 
B)  with imperfect experience rating such that once its layoffs increase beyond a certain level, it does not have to pay a higher unemployment insurance tax rate. 
C)  with imperfect experience rating such that once its layoffs fall below a certain level, it pays the same minimum unemployment insurance tax rate. 
D)  with imperfect experience rating such that above a certain level, the unemployment tax rate increases more than in proportion to layoffs.

Question 7

What is the replacement rate of unemployment insurance in the United States? Does an increase in the replacement rate of unemployment insurance increase the duration of spells of unemployment? Using search theory,what would the rationale be for increasing the replacement rate or,for that matter,for even having unemployment insurance in the first place?

Accepted Answer

Unemployment insurance in the United Sta

Question 8

What are the sources of unemployment identified by the U.S.Department of Labor? Give some sense of the relative importance of each category in a non-recession year.

Accepted Answer

The Department of Labor identifies four

Question 9

If all employers pay an efficiency wage and if workers in areas with low unemployment rates can easily find alternative jobs,then one would expect

Accepted Answer

A)  average wages to be directly (positively) related to area unemployment rates. 
B)  average wages times one minus the unemployment rate to be the same across areas. 
C)  the duration of unemployment in an area, but not necessarily the rate, to be inversely related to the average wage of the area. 
D)  average wages will be higher in areas with low unemployment rates. 
A)  average wages to be directly (positively) related to area unemployment rates. 
B)  average wages times one minus the unemployment rate to be the same across areas. 
C)  the duration of unemployment in an area, but not necessarily the rate, to be inversely related to the average wage of the area. 
D)  average wages will be higher in areas with low unemployment rates.

Question 10

Unemployment insurance in the United States is structured so that

Accepted Answer

A)  replacement rates are constant. 
B)  almost all unemployed workers can collect UI benefits. 
C)  UI benefits are partially linked to previous pay. 
D)  UI benefits may be collected for one year after the job loss. 
A)  replacement rates are constant. 
B)  almost all unemployed workers can collect UI benefits. 
C)  UI benefits are partially linked to previous pay. 
D)  UI benefits may be collected for one year after the job loss.

Question 11

A worker who has quit one job to have time to search for a similar position is counted as what type of unemployment?

Accepted Answer

A)  frictional 
B)  occupational 
C)  regional 
D)  cyclical 
A)  frictional 
B)  occupational 
C)  regional 
D)  cyclical

Question 12

If all employers pay an efficiency wage,then which of the following will increase the unemployment rate,other things the same?

Accepted Answer

A)  It becomes less costly to monitor worker productivity. 
B)  Due to a mistake, firms reduce their wages. 
C)  The cost to the firm of workers shirking goes up. 
D)  Workers put a lower value on shirking. 
A)  It becomes less costly to monitor worker productivity. 
B)  Due to a mistake, firms reduce their wages. 
C)  The cost to the firm of workers shirking goes up. 
D)  Workers put a lower value on shirking.

Question 13

The stock of unemployed workers at any given time consists mostly of

Accepted Answer

A)  people who have short spells of unemployment. 
B)  people who have long spells of unemployment. 
C)  people who have been laid off from one employer and become employed by another. 
D)  people who have searched for jobs, but who have become discouraged. 
A)  people who have short spells of unemployment. 
B)  people who have long spells of unemployment. 
C)  people who have been laid off from one employer and become employed by another. 
D)  people who have searched for jobs, but who have become discouraged.

Question 14

Suppose that no one enters or leaves the labor force and that the fraction of the unemployed getting a job (in a given period)is 0.10 and the fraction of the employed becoming unemployed is 0.02.What is the approximate unemployment rate when the flows into and out of unemployment are in balance?

Accepted Answer

A)  9% 
B)  10% 
C)  17% 
D)  22% 
A)  9% 
B)  10% 
C)  17% 
D)  22%

Question 15

What is the natural rate of unemployment? What factors does the natural rate of unemployment depend on?

Accepted Answer

Several definitions of the natural rate

Question 16

What is structural unemployment? How does structural unemployment arise on a geographic basis?

Accepted Answer

Structural unemployment occurs when ther

Question 17

Theoretically,existence of generous unemployment insurance will

Accepted Answer

A)  reduce the unemployment rate. 
B)  reduce reservation wages. 
C)  improve job matches. 
D)  increase income inequality. 
A)  reduce the unemployment rate. 
B)  reduce reservation wages. 
C)  improve job matches. 
D)  increase income inequality.

Question 18

How does demand-deficient unemployment arise? Use a demand/supply diagram to illustrate your answer.

Accepted Answer

Student should draw a graph like Figure

Question 19

A researcher observes that more generous unemployment benefits result in a greater duration of unemployment and a great improvement in job matches.This suggests that more generous benefits

Accepted Answer

A)  make job searchers more selective in the jobs they accept. 
B)  make job searchers increase the intensity of search by searching more openings per period. 
C)  both A and B 
D)  neither A nor B 
A)  make job searchers more selective in the jobs they accept. 
B)  make job searchers increase the intensity of search by searching more openings per period. 
C)  both A and B 
D)  neither A nor B

Question 20

A reservation wage is

Accepted Answer

A)  the lowest wage a worker will accept. 
B)  the lowest wage a company will offer. 
C)  the highest wage a company will offer. 
D)  the wage at which a company's profits are maximized. 
A)  the lowest wage a worker will accept. 
B)  the lowest wage a company will offer. 
C)  the highest wage a company will offer. 
D)  the wage at which a company's profits are maximized.

The natural rate of unemployment

How is unemployment defined in the United States? How is the number of unemployed counted in the United States? What is the unemployment rate?

In the face of declining demand,unions usually tend to favor laying off workers rather than lowering wages.Which of these factors would not explain why this occurs?

A worker who is laid off because his or her company chooses to move from Wisconsin to North Carolina is counted as ________ unemployment.

Advance notice of lay-offs should help to reduce

If Ajax Incorporated is a very unstable employer that frequently lays off workers,it will prefer to locate its plants in states

What are the sources of unemployment identified by the U.S.Department of Labor? Give some sense of the relative importance of each category in a non-recession year.

If all employers pay an efficiency wage and if workers in areas with low unemployment rates can easily find alternative jobs,then one would expect

Unemployment insurance in the United States is structured so that

A worker who has quit one job to have time to search for a similar position is counted as what type of unemployment?

If all employers pay an efficiency wage,then which of the following will increase the unemployment rate,other things the same?

The stock of unemployed workers at any given time consists mostly of

Suppose that no one enters or leaves the labor force and that the fraction of the unemployed getting a job (in a given period)is 0.10 and the fraction of the employed becoming unemployed is 0.02.What is the approximate unemployment rate when the flows into and out of unemployment are in balance?

What is the natural rate of unemployment? What factors does the natural rate of unemployment depend on?

What is structural unemployment? How does structural unemployment arise on a geographic basis?

Theoretically,existence of generous unemployment insurance will

How does demand-deficient unemployment arise? Use a demand/supply diagram to illustrate your answer.

A researcher observes that more generous unemployment benefits result in a greater duration of unemployment and a great improvement in job matches.This suggests that more generous benefits

A reservation wage is

Introduction

Overview of the Labor Market

The Demand for Labor

Labor Demand Elasticities

Frictions in the Labor Market

Supply of Labor to the Economy: The Decision to Work

Labor Supply: Household Production, the Family, and the Life Cycle

Compensating Wage Differentials and Labor Markets

Investments in Human Capital: Education and Training

Worker Mobility: Migration, Immigration, and Turnover

Pay and Productivity: Wage Determination within the Firm

Gender,Race,and Ethnicity in the Labor Market

Unions and the Labor Market

Inequality in Earnings

The Labor-Market Effects of International Trade and Production Sharing

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Exam 14: Unemployment

The natural rate of unemployment

How is unemployment defined in the United States? How is the number of unemployed counted in the United States? What is the unemployment rate?

In the face of declining demand,unions usually tend to favor laying off workers rather than lowering wages.Which of these factors would not explain why this occurs?

A worker who is laid off because his or her company chooses to move from Wisconsin to North Carolina is counted as ________ unemployment.

Advance notice of lay-offs should help to reduce

If Ajax Incorporated is a very unstable employer that frequently lays off workers,it will prefer to locate its plants in states

What are the sources of unemployment identified by the U.S.Department of Labor? Give some sense of the relative importance of each category in a non-recession year.

If all employers pay an efficiency wage and if workers in areas with low unemployment rates can easily find alternative jobs,then one would expect

Unemployment insurance in the United States is structured so that

A worker who has quit one job to have time to search for a similar position is counted as what type of unemployment?

If all employers pay an efficiency wage,then which of the following will increase the unemployment rate,other things the same?

The stock of unemployed workers at any given time consists mostly of

Suppose that no one enters or leaves the labor force and that the fraction of the unemployed getting a job (in a given period)is 0.10 and the fraction of the employed becoming unemployed is 0.02.What is the approximate unemployment rate when the flows into and out of unemployment are in balance?

What is the natural rate of unemployment? What factors does the natural rate of unemployment depend on?

What is structural unemployment? How does structural unemployment arise on a geographic basis?

Theoretically,existence of generous unemployment insurance will

How does demand-deficient unemployment arise? Use a demand/supply diagram to illustrate your answer.

A researcher observes that more generous unemployment benefits result in a greater duration of unemployment and a great improvement in job matches.This suggests that more generous benefits

A reservation wage is

Introduction

Overview of the Labor Market

The Demand for Labor

Labor Demand Elasticities

Frictions in the Labor Market

Supply of Labor to the Economy: The Decision to Work

Labor Supply: Household Production, the Family, and the Life Cycle

Compensating Wage Differentials and Labor Markets

Investments in Human Capital: Education and Training

Worker Mobility: Migration, Immigration, and Turnover

Pay and Productivity: Wage Determination within the Firm

Gender,Race,and Ethnicity in the Labor Market

Unions and the Labor Market

Inequality in Earnings

The Labor-Market Effects of International Trade and Production Sharing

Filters