Macroeconomics Test 3

What is not a characteristic of minimum-wage workers?

They tend to be full time

A minimum wage is likely to have a greater impact on the market for skilled workers than on the market unskilled workers.

False

An efficiency wage is like a minimum wage in that firms are required by legislation to pay it.

False

Due to the existence of "discouraged workers", the official unemployment rate may overstate true unemployment.

False

If wages were always at the competitive equilibrium, there would be absolutely no unemployment.

False

Paying efficiency wages tends to increase worker turnover because workers can get continually higher wages if they "job hop".

False

The presence of unemployment insurance tends to decrease the unemployment rate because recipients of unemployment benefits are not counted in the labor rate.

False

The unemployment rate is about the same for the various demographic groups: men, women, black, white, young, and old.

False

What government policies would fail to lower the unemployment rate?

Raise the minimum wage

The amount of unemployment that the economy normally experiences is known as

The natural rate of unemployment

If, for any reason, the wage is held above the competitive equilibrium wage

The quantity of labor supplied will exceed the quantity of labor demanded, and there will be unemployment.

A union is a labor cartel

True

Advocates of unions argue that unions may increase efficiency in some circumstances because they decrease the cost of bargaining between labor and management.

True

Firms may voluntarily pay wages above the level that balances the supply and demand for workers because the higher wage improves the average quality of workers that apply for employment.

True

In a post WW2 United States, the labor-force participation rate has been rising for women and has been falling for men.

True

The presence of a union tends to raise the wage for insiders and lower the wage for outsiders.

True

Whenever the wage rises above the competitive equilibrium, regardless of the source, the result is additional unemployment.

True

According to the Bureau of Labor Statistics, a husband who chooses to stay home and take care of the household is

not in the labor force