Exam 15: Unemployment: Part B

Changes in the products for which a nation has a comparative advantage create sectoral shocks leading to an increase in frictional unemployment.

The natural rate of unemployment is impervious to economic policy.

Long-run unemployment arises from a single problem that has a single solution.

Structural unemployment results when wages are,for some reason,set above the level that brings supply and demand into equilibrium.

The introduction of a union into a firm benefits all of that firm's workers.

A union is an employer association that bargains with workers over wages,benefits,and working conditions.

One explanation for long-run unemployment is that it takes time for workers to search for the jobs that are best suited for them.

Advocates of government-run employment agencies and public training programs believe they make job search more efficient.

When job search is the explanation for unemployment,workers are searching for the jobs that best suit their tastes and skills,but when the wage is above the equilibrium level,the quantity of labor supplied exceeds the quantity of labor demanded,and workers are unemployed because they are waiting for jobs to open up.

If all workers and all jobs were the same such that all workers were equally well suited for all jobs,then there would be no frictional unemployment.

Workers in unions reap the benefit of collective bargaining,while workers not in unions bear some of the cost.

The labor-force participation rate tells us the fraction of the population that has chosen to participate in the labor market.

Not all unemployment ends with the job seeker finding a job.

Most people rely primarily on income other than their labor earnings to maintain their standard of living.

Over the past several decades in the United States,the labor-force participation rate of women has increased and the labor-force participation rate of men had decreased.

A typical American worker covered by unemployment insurance receives 50 percent of his former wages for 52 weeks.

According to the theory of efficiency wages,firms operate more efficiently if wages are above the equilibrium level.

If the wage is kept above the equilibrium wage for any reason,the result is structural unemployment.

Frictional unemployment is often thought to explain relatively short spells of unemployment.

The unemployed who quit their jobs,were fired for cause,or just entered the labor force are eligible for unemployment insurance.