imt quiz 6

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.

If the fraction of employed workers who lose their jobs each month (the rate of job separation) is 0.01 and the fraction of the unemployed who find a job each month is 0.09 (the rate of job findings), then the natural rate of unemployment is:

10 percent.

In the case of unions, the conflict of interest between different groups of workers results in insiders wanting _____, while outsiders want _____.

high wages; more hirings

Government policies directed at reducing frictional unemployment include:

making unemployment insurance 100 percent experience rated.

Wage rigidity:

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

Efficiency-wage theories suggest that a firm may pay workers more than the market-clearing wage for all of these reasons EXCEPT to: -reduce the firm's wage bill. -improve the quality of the firm's labor force. -increase worker effort. -reduce the firm's wage bill.

reduce the firm's wage bill.

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

sectoral shifts.

The natural rate of unemployment is:

the average rate of unemployment around which the economy fluctuates.

When the unemployment rate is at a steady state:

the number of people finding jobs equals the number of people losing jobs.

All of these are reasons for frictional unemployment EXCEPT: -the flow of information is imperfect. -workers have different preferences and abilities. -geographic mobility takes time. -unemployed workers accept the first job offer that they receive.

unemployed workers accept the first job offer that they receive.

Examples of "active" labor-market policies include all of these EXCEPT: -subsidized employment. -job-training programs. -unemployment insurance. -job-search assistance.

unemployment insurance.

Discouraged workers are individuals who:

want a job but have given up looking for one.