hw 8

All of the following are reasons for frictional unemployment except: Select one: a. workers have different preferences and abilities. b. unemployed workers accept the first job offer that they receive. c. the flow of information is imperfect. d. geographic mobility takes time.

unemployed workers accept the first job offer that they receive.

A policy that decreases the job separation rate _____ the natural rate of unemployment. Select one: a. will increase b. will decrease c. will not change d. could either increase or decrease

will decrease

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: Select one: a. a lower real wage and a rise in unemployment. b. a lower real wage and no change in unemployment. c. a lower real wage and less unemployment. d. no change in real wage or in unemployment.

a lower real wage and no change in unemployment.

Short-term unemployment is most likely to be ______ unemployment, while long-term unemployment is mostly likely to be _____ unemployment. Select one: a. structural; frictional b. structural; the natural rate of c. the natural rate of; frictional d. frictional; structural

frictional; structural

Assume that a country experiences a reduction in productivity that shifts the labor demand curve downward and to the left. If the real wage were rigid, this would lead to: Select one: a. no change in the real wage and a rise in unemployment. b. no change in the real wage and no change in unemployment. c. no change in the real wage and a fall in unemployment. d. a decrease in the real wage

no change in the real wage and a rise in unemployment.

Wage rigidity: Select one: a. forces labor demand to equal labor supply. b. is caused by sectoral shifts. c. prevents labor demand and labor supply from reaching the equilibrium level. d. increases the rate of job finding.

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. Select one: a. productivity b. turnover c. unionization d. shirking

productivity

The natural rate of unemployment is: Select one: a. the average rate of unemployment around which the economy fluctuates. b. about 10 percent of the labor force. c. a rate that never changes. d. the transition of individuals between employment and unemployment.

the average rate of unemployment around which the economy fluctuates.

All of the following are causes of structural unemployment except: Select one: a. minimum-wage laws. b. the monopoly power of unions. c. unemployment insurance. d. efficiency wages.

unemployment insurance

Workers unemployed as a result of wage rigidity are: Select one: a. actively searching for a job to match their skills. b. not eligible to receive unemployment insurance benefits. c. waiting for a job to become available. d. relocating to another part of the country as a result of sectoral shifts.

waiting for a job to become available

Spells of unemployment end when the unemployed person finds a job or: Select one: a. withdraws from the labor force. b. enters the labor force. c. runs out of unemployment insurance compensation. d. refuses to answer unemployment survey questions.

withdraws from the labor force

The natural rate of unemployment in the United States since 1950 has averaged between ______ and ______ percent. Select one: a. 0; 1 b. 1; 3 c. 5; 6 d. 10; 15

5; 6

Unions contribute to structural unemployment when collective bargaining results in wages: Select one: a. above the equilibrium level. b. below the minimum wage. c. below the equilibrium level. d. above the level of unemployment compensation.

above the equilibrium level

Public policy to increase the job finding rate include _____ and public policy to decrease the job separation rate include _____. Select one: a. government employment agencies; higher unemployment insurance benefits b. job training programs; 100 percent experience rated unemployment insurance c. higher minimum wage laws; payment of unemployment benefits for longer periods d. higher efficiency wages; partially experience rated unemployment insurance

job training programs; 100 percent experience rated unemployment insurance

Sectoral shifts: Select one: a. lead to wage rigidity. b. explain the payment of efficiency wages. c. depend on the level of the minimum wage. d. make frictional employment inevitable.

make frictional employment inevitable

Unemployment insurance increases the amount of frictional unemployment by: Select one: a. making workers more frantic in their search for new jobs. b. inducing workers to accept the first job offer that they receive. c. making employers more reluctant to lay off workers. d. softening the economic hardship of unemployment

softening the economic hardship of unemployment