Chapter 7 Module of Macro

At the full employment level of output, the natural rate of unemployment for the U.S. is estimated to be between;

5.0% and 6.5%

A change in which of these factors would cause a movement along the supply curve for labor rather than a shift of the labor supply curve?

A change in the wage

An economy's stock of capital consists of;

An economy's stock of capital consists of;

Which of these factors will not cause the demand curve for labor to shift?

a change in the wage

In the real business cycle model, which of these best explains an increase in real GDP above the full-employment level?

a positive technology shock

Economic models that assume wages and prices will adjust to correct short-run deviations from the long-run equilibrium are collectively known as;

classical models

A decline in investment spending as a result of an increase in government spending and borrowing is known as:

crowding out

The decline in private expenditures that results from an increase in government purchases is known as:

crowding out

If the labor demand is unchanged, an increase in the labor supply will __________ the equilibrium wage and __________ the number of workers employed.

decrease increase

When firms increase their capital stock, each worker will become more productive, and the firm will;

demand more labor

As the wage increases, the demand for labor curve:

does not shift, but the quantity demanded for labor decreases

When the economy is at full employment, which types of unemployment remain?

frictional and structural

According to real business cycle theory, shifts in aggregate demand:

have no impact on real GDP

A tax on labor will result in;

lower labor demand

Monetary stimulus designed to increase aggregate demand would have __________ on real output according to real business cycle theory.

no impact

Which of these graphs best depicts the impact of an increase in immigration on the labor market?

panel B

Classical theory began to be questioned when there was;

persistent high unemployment during the Great Depression

The relationship between the inputs used by the firm and the maximum output it can produce is known as the:

production function

The ------- wage is the wage rate paid to employees adjusted for inflation.

real

The financial crisis in the United States that began in 2007 reduced the opportunities for investment bankers, stockbrokers, and other financial workers. Many workers left this industry causing the labor supply curve in this market to:

shift to the left

As the population increases, the labor supply curve:

shift to the right

As technology improves, the demand for labor curve:

shifts to the right

As the price of the final product increases, the demand for labor curve:

shifts to the right

According to real business cycle theory, a major source of fluctuations in economic activity is __________.

shocks to technology

When graphing a conventional short-run production function, we place __________ on the horizontal axis and __________ on the vertical axis.

the variable input output