MACRO Chp 7

According to Oliver Blanchard, Europeans are more likey to use increases in real wages resulting from technological progress to increase ____, and Americans are more likely to use these increases in real wages to increase _____.

Hours of leisure; consumption of goods and services

Wage rigidity:

prevents labor demand and labor supply from reaching the equilibrium level

Any policy aimed at lowering the natural rate of unemployment must either ____ the rate of job separation or ____ the rate of job finding.

reduce; increase

Economists call the changes in the composition of demand among industries and regions:

sectoral shifts

Unemployment insurance increase the amount of frictional unemployment by:

softening the economic hardship of unemployment

One efficiency-wage theory implies that firms pay higher wages because:

the more firms pays its workers, the greater their incentive to stay with the firm

When the unemployment rate is at a steady state:

the number of people find jobs equals the number of people losing their jobs

All of these are reasons for frictional unemployment EXCEPT:

unemployed workers accept the first job after that they receive

The macroeconomic problem that affects individuals most directly and severely is:

unemployment

If the steady-state rate of unemployment equals 0.10 and the fraction of employed workers who lose their jobs each month (the rate of job separation) is 0.02, then the fraction of unemployed workers who find jobs each month (the rate of job findings) must be:

.18

Suppose that over the course of a year 100 people are unemployed for four weeks each (the short-term unemployed), while 10 people are unemployed for 52 weeks each (the long-term unemployed). Approximately what percentage of the total spells of unemployment were attributable to the short-term unemployed?

43.5%

Which of these characteristics made the 2008-2009 recession differ MOST sharply from previous recessions?

a large spike in the duration of unemployment

Which of these is an example of frictional unemployment?

dave searches for a new job after voluntarily moving to san diego

The earned income tax credit

does not raise labor costs

As the relative demand for unskilled workers falls, wages for unskilled workers _____, and unemployment compensation becomes a _____ attractive option.

fall; more

Which of these hypotheses is consistent with fewer hours worked per year in Europe than in the United States?

higher tax rates in Europe than in the United States

Government policies directed at reducing frictional unemployment include:

making employment insurance 100% experience-rated

All of these are causes of structural unemployment EXCEPT:

unemployment insurance

A policy that increase the job-finding rate ____ the natural rate of unemployment.

will decrease

According to studies of individual unemployed workers, these workers are MOST likely to find a job:

within a few weeks of their unemployment insurance running out