Macro Chapter 7

Paying efficiency wages are a way for a company to cut costs and become more efficient, and are therefore lower than market wages.

False

The natural rate of unemployment consists of frictional unemployment plus cyclical unemployment.

False

Which of the following explains the changes in the U.S. adult male labor force participation rate since 1948?

Younger men are remaining in school longer as compared to the past.

Labor unions cause unemployment because the union contract wage is set

above the market wage, causing a surplus of labor.

Minimum wage laws cause unemployment because the legal minimum wage is set

above the market wage, causing labor demand to be less than labor supply.

The labor force equals the number of people

employed plus unemployed.

The United States has ________ social insurance programs, and generally has a ________ unemployment rate, as compared to Canada and Western Europe.

less generous; lower

Someone who is available for work but has not actively looked for work in the previous four weeks would be classified as

not in the labor force.

Full employment is not considered to be zero unemployment, because

people do not find jobs instantaneously.

People who lost their jobs as hand-drawn animators because of the popularity of computer-generated 3D animation are examples of persons who are suffering

structural unemployment.

The unemployment rate is an important economic statistic that can tell us about the health of the economy. If the unemployment rate turns out to be high or higher than anticipated, we would expect

that stock prices are more likely to fall.

During the month of May, 10 million workers moved from being classified as "unemployed" to being classified as "employed." As a result

the unemployment rate fell.

Why might firms pay wages that are above the equilibrium wage in a market?

to increase the productivity of their workers

If the number of unemployed workers is 19 million, the number in the working-age population is 500 million, and the unemployment rate is 4%, how many workers are in the labor force?

475 million

If the number employed is 190 million, the working-age population is 230 million, and the number unemployed is 10 million, then the unemployment rate is

5%

Most economists believe that labor unions significantly increase the overall unemployment rate in the United States.

False

The household survey asks adults about their employment status and is used to compile the monthly unemployment rate.

True

Which of the following would increase the unemployment rate?

an increase in unemployment insurance payments