Question 1

Use the following to answer questions 
Figure: The Labor Market 
-(Figure: The Labor Market)  Look at the figure The Labor Market. What will be the level of employment if firms decide to pay an efficiency wage of $16?

Accepted Answer

A)   80,000
B)   100,000
C)   110,000
D)   200,000

Question 2

Counted among the unemployed are underemployed people, who cannot find a job working as many hours as they wish.

Accepted Answer

A) True 
 B)False  False

Question 3

You are a college student and not working or looking for work. You are:

Accepted Answer

A)   unemployed.
B)   in the labor force but not employed.
C)   not part of the labor force.
D)   counted in the labor force as underemployed.

Question 4

Use the following to answer questions 
Figure: The Effect of a Minimum Wage F. The quantity of labor supplied may_____, resulting in structural unemployment. A)  decrease to QD B)  stay at QE C)  increase to QS D)  stay at WE" class="answers-bank-image d-inline" rel="preload" >
-(Figure: The Effect of a Minimum Wage)  Look at the figure The Effect of a Minimum Wage. Suppose the labor market is in equilibrium at E when the government imposes a minimum wage of WF. The quantity of labor supplied may_____, resulting in structural unemployment.

Accepted Answer

A)   decrease to QD
B)   stay at QE
C)   increase to QS
D)   stay at WE

Question 5

The labor demand curve is negatively sloped because:

Accepted Answer

A)   more people are willing to work at low wages than at high wages.
B)   more people are willing to work at high wages than at low wages.
C)   employers are willing to hire more people at low wages.
D)   employers are willing to hire more people at high wages.

Question 6

Deflation is:

Accepted Answer

A)   a decrease in unemployment.
B)   a decreasing aggregate price level.
C)   a decline in wages.
D)   a recession.

Question 7

Kelli is a server at a casual restaurant in a small town. In each of the following situations, explain Kelli's type of unemployment.
a. The local economy is in a minor recession and the restaurant lays Kelli off. The owner assures her that she will be rehired when business picks up again.
b. A large factory, the major employer in the town, permanently closes, and this hurts all restaurants in town. The restaurant fires Kelli because the owner can only afford to stay open on the weekends.
c. Kelli is dissatisfied with her schedule at the restaurant and quits her job. She is qualified to work at other restaurants and immediately begins to send her résumé to restaurants all over town.

Accepted Answer

a. This is cyclical unemployment, due to the temporary dip in the business cycle.
b. This is structural unemployment, due to a permanent decrease in the demand for this labor. At the current wage, there is now a surplus of labor.
c. This is frictional unemployment; she is voluntarily seeking a better match for her skills and needs in the labor market.

Question 8

The real wage is the wage rate _____ the price level.

Accepted Answer

A)   plus
B)   minus
C)   divided by
D)   multiplied by

Question 9

Two primary goals for macroeconomists are price stability and:

Accepted Answer

A)   no unemployment.
B)   no frictional unemployment.
C)   low unemployment.
D)   no structural unemployment.

Question 10

High rates of inflation often result in people spending inordinate amounts of time trying to make transactions and finding ways to keep the real value of their money from decreasing. This is an example of _____ costs.

Accepted Answer

A)   shoe-leather
B)   menu
C)   efficiency wage
D)   unit-of-account

Question 11

Economists generally agree that sufficiently high minimum wage laws:

Accepted Answer

A)   cause unemployment.
B)   help lower the structural unemployment rate.
C)   decrease the labor force participation rate.
D)   make an opportunity for discouraged workers.

Question 12

During rapid price inflation, firms must frequently change prices. The cost of changing listed prices is known as the _____ cost.

Accepted Answer

A)   menu
B)   real interest rate
C)   shoe-leather
D)   unit-of-account

Question 13

Use the following to answer questions 
-(Table: Employment Data)  Look at the table Employment Data. The labor force is:

Accepted Answer

A)   33 million.
B)   32 million.
C)   31 million.
D)   22 million.

Question 14

Frictional unemployment exists because of all of the following reasons EXCEPT:

Accepted Answer

A)   that new jobs are continually being created.
B)   that some old jobs are always being destroyed.
C)   that new workers are always entering the labor market.
D)   for the minimum wage.

Question 15

Suppose that the nominal rate of interest is 7% and the inflation rate is 3%. The real rate of interest is:

Accepted Answer

A)   3%.
B)   4%.
C)   10%.
D)   7%.

Question 16

The sum of the frictional and structural rates of unemployment is the:

Accepted Answer

A)   cyclical rate of unemployment.
B)   cyclical rate of employment.
C)   natural rate of unemployment.
D)   natural rate of employment.

Question 17

Use the following to answer questions : 
-(Table: Population Data for Estill County)  Look at the table Population Data for Estill County. What is the unemployment rate?

Accepted Answer

A)   64%
B)   48%
C)   17%
D)   6%

Question 18

Suppose that Allison has an accounting degree, but she lost her job two months ago when her company merged with another firm. Allison hasn't been able to find another accounting job, so she has taken a part-time job as a sales clerk at a clothing store. The Bureau of Labor Statistics classifies Allison as:

Accepted Answer

A)   a marginally attached worker.
B)   a discouraged worker.
C)   underemployed.
D)   unemployed.

Question 19

When labor unions successfully bargain for wage rates that are _____ than the equilibrium wage rate, they may cause _____.

Accepted Answer

A)   lower; frictional unemployment.
B)   equal to; shortages in that labor market.
C)   higher than; an increase in structural unemployment.
D)   higher than; shortages in that labor market. C

Question 20

The population of discouraged workers causes the:

Accepted Answer

A)   actual unemployment rate to increase when the workers are not included in the unemployment calculation.
B)   actual unemployment rate to understate the true level of unemployment.
C)   actual unemployment rate to overstate the true level of unemployment.
D)   natural rate of unemployment to increase.

Exam 22: Unemployment and Inflation

Use the following to answer questions Figure: The Labor Market -(Figure: The Labor Market) Look at the figure The Labor Market. What will be the level of employment if firms decide to pay an efficiency wage of $16?

Correct Answer
verified

Counted among the unemployed are underemployed people, who cannot find a job working as many hours as they wish.

Correct Answer
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False

You are a college student and not working or looking for work. You are:

Correct Answer
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Correct Answer
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The labor demand curve is negatively sloped because:

Correct Answer
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Deflation is:

Correct Answer
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The real wage is the wage rate _____ the price level.

Correct Answer
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Two primary goals for macroeconomists are price stability and:

Correct Answer
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High rates of inflation often result in people spending inordinate amounts of time trying to make transactions and finding ways to keep the real value of their money from decreasing. This is an example of _____ costs.

Correct Answer
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Economists generally agree that sufficiently high minimum wage laws:

Correct Answer
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During rapid price inflation, firms must frequently change prices. The cost of changing listed prices is known as the _____ cost.

Correct Answer
verified

Use the following to answer questions -(Table: Employment Data) Look at the table Employment Data. The labor force is:

Correct Answer
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Frictional unemployment exists because of all of the following reasons EXCEPT:

Correct Answer
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Suppose that the nominal rate of interest is 7% and the inflation rate is 3%. The real rate of interest is:

Correct Answer
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The sum of the frictional and structural rates of unemployment is the:

Correct Answer
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Use the following to answer questions : -(Table: Population Data for Estill County) Look at the table Population Data for Estill County. What is the unemployment rate?

Correct Answer
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When labor unions successfully bargain for wage rates that are _ than the equilibrium wage rate, they may cause _.

Correct Answer
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C

The population of discouraged workers causes the:

Correct Answer
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Exam 22: Unemployment and Inflation

Use the following to answer questions Figure: The Labor Market -(Figure: The Labor Market) Look at the figure The Labor Market. What will be the level of employment if firms decide to pay an efficiency wage of $16?

Correct AnswerverifiedShow Answer

Counted among the unemployed are underemployed people, who cannot find a job working as many hours as they wish.

Correct AnswerverifiedFalse

You are a college student and not working or looking for work. You are:

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

The labor demand curve is negatively sloped because:

Correct AnswerverifiedShow Answer

Deflation is:

Correct AnswerverifiedShow Answer

The real wage is the wage rate _____ the price level.

Correct AnswerverifiedShow Answer

Two primary goals for macroeconomists are price stability and:

Correct AnswerverifiedShow Answer

High rates of inflation often result in people spending inordinate amounts of time trying to make transactions and finding ways to keep the real value of their money from decreasing. This is an example of _____ costs.

Correct AnswerverifiedShow Answer

Economists generally agree that sufficiently high minimum wage laws:

Correct AnswerverifiedShow Answer

During rapid price inflation, firms must frequently change prices. The cost of changing listed prices is known as the _____ cost.

Correct AnswerverifiedShow Answer

Use the following to answer questions -(Table: Employment Data) Look at the table Employment Data. The labor force is:

Correct AnswerverifiedShow Answer

Frictional unemployment exists because of all of the following reasons EXCEPT:

Correct AnswerverifiedShow Answer

Suppose that the nominal rate of interest is 7% and the inflation rate is 3%. The real rate of interest is:

Correct AnswerverifiedShow Answer

The sum of the frictional and structural rates of unemployment is the:

Correct AnswerverifiedShow Answer

Use the following to answer questions : -(Table: Population Data for Estill County) Look at the table Population Data for Estill County. What is the unemployment rate?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When labor unions successfully bargain for wage rates that are _____ than the equilibrium wage rate, they may cause _____.

Correct AnswerverifiedC

The population of discouraged workers causes the:

Correct AnswerverifiedShow Answer

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False

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When labor unions successfully bargain for wage rates that are _ than the equilibrium wage rate, they may cause _.

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C

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