Intermediate Macro Chapter 7 Quiz

Most spells of unemployment are ______ term, and most weeks of unemployment are attributable to ______-term unemployment.

short; long

All of the following are reasons for frictional unemployment except:

unemployed workers accept the first job offer that they receive.

If the steady-state rate of unemployment equals 0.125 and the fraction of unemployed workers who find jobs each month (the rate of job findings) is 0.56, then the fraction of employed workers who lose their jobs each month (the rate of job separations) must be:

0.08.

Economists who have studied minimum-wage laws in the United States find that a 10 percent increase in the minimum wage increases teenage unemployment by about:

1 to 3 percent.

If the number of employed workers equals 200 million and the number of unemployed workers equals 20 million, the unemployment rate equals ______ percent (rounded to the nearest percent).

9

Assume that a country experiences a reduction in productivity that shifts the labor demand curve downward and to the left. If the labor market were always in equilibrium, this would lead to:

a lower real wage and no change in unemployment.

Entry into and exit from the labor force are important to the determination of the unemployment rate because:

almost one-half of all spells of unemployment end in the unemployed person's withdrawal from the labor marke

If the rate of separation is 0.02 and the rate of job finding is 0.08 but the current unemployment rate is 0.10, then the current unemployment rate is ______ the equilibrium rate, and in the next period it will move ______ the equilibrium rate.

below; toward

In 2007 in the United States among labor-force members ages 16 to 19, the highest unemployment rate was for:

black males.

A spell of unemployment begins when a person leaves his or her job or:

has been without a job for at least four weeks.

Across countries of Europe, greater spending on unemployment insurance tends to _____ unemployment and more "active" labor-market policies tend to _____ unemployment.

increase; decrease

The unemployment insurance system may be desirable because unemployment insurance:

induces workers to reject unattractive job offers.

Sectoral shifts:

make frictional employment inevitable.

Discouraged workers are counted as:

out of the labor force.

Most current unemployment-insurance programs are:

partially experience rated.

Wage rigidity:

prevents labor demand and labor supply from reaching the equilibrium level.

According to efficiency-wage theories, firms benefit by paying higher-than-equilibrium wages because worker _____ increases.

productivity

All of the following are causes of structural unemployment except:

unemployment insurance

A policy that decreases the job separation rate _____ the natural rate of unemployment.

will decrease

A policy that increases the job-finding rate _____ the natural rate of unemployment.

will decrease