Question 1

Unions:

Accepted Answer

A)   are unnecessary if the market does a good job of determining fair wages.
B)   provide firms with a mechanism to more efficiently fire less productive workers.
C)   are gaining power in the United States.
D)   All of these are true.E) None of the above
F) All of the above

Question 2

During a recession, unemployment is:

Accepted Answer

A)   more common.
B)   less common.
C)   unpredictable.
D)   the same for all demographic groups.E) None of the above
F) A) and B)

Question 3

Real-wage unemployment:

Accepted Answer

A)   occurs when there is a mismatch between the skills workers can offer and the skills that are in demand.
B)   is caused by workers changing their locations, jobs, or careers.
C)   is the effect of wages remaining persistently above the market-clearing level.
D)   is also called cyclical unemployment.E) B) and C)
F) A) and B)

Question 4

Which government office is in charge of collecting official employment statistics?

Accepted Answer

A)   Bureau of Labor Statistics
B)   Bureau of Economic Analysis
C)   Bureau of Industry and Security
D)   Bureau of the CensusE) B) and C)
F) B) and D)

Question 5

Carol is an autoworker who was laid off when the last factory in the area shut down. She has looked everywhere for another job as an autoworker, but cannot find one. Carol is:

Accepted Answer

A)   frictionally unemployed.
B)   structurally unemployed.
C)   real-wage unemployed.
D)   a discouraged worker.E) A) and C)
F) B) and C)

Question 6

Real-wage unemployment can be caused by:

Accepted Answer

A)   minimum wage laws.
B)   retraining programs.
C)   low-interest student loans.
D)   None of these cause real-wage unemployment.E) A) and D)
F) C) and D)

Question 7

Employers choose to offer efficiency wages because they:

Accepted Answer

A)   give employees an incentive to work hard to keep their jobs.
B)   reduce turnover, saving employers time and money.
C)   make workers more productive.
D)   All of these are true.E) All of the above
F) C) and D)

Question 8

All else equal, if unemployment falls by 2 percentage points to 6 percent, this indicates that:

Accepted Answer

A)   2 out of every 10 in the labor force lost a job.
B)   20 out of every 1,000 unemployed found a job.
C)   2 out of every 100 in the labor force lost a job.
D)   4 out of every 100 unemployed found a job.E) A) and B)
F) None of the above

Question 9

When economists say wages are "sticky," they mean that wages:

Accepted Answer

A)   are slow to adjust to changes in the economy.
B)   are subject to a wide range of regulations from the government.
C)   tend to change before other indicators of the business cycle.
D)   are unpredictable in terms of how they will change.E) A) and B)
F) All of the above

Question 10

Unemployment insurance:

Accepted Answer

A)   varies widely across countries.
B)   has a set minimum in the United States.
C)   is typically provided for 32 weeks in the United States.
D)   All of these are true.E) B) and C)
F) A) and B)

Question 11

How would a new national policy that teaches technical skills to blue-collar workers affect the natural rate of unemployment?

Accepted Answer

A)   It would increase the natural rate of unemployment.
B)   It would decrease the natural rate of unemployment.
C)   The natural rate of unemployment would stay the same.
D)   The impact on the natural rate of employment is unclear.E) C) and D)
F) A) and B)

Question 12

An economic slowdown would likely cause the labor _______ curve to shift to the _______.

Accepted Answer

A)   demand; left
B)   demand; right
C)   supply; left
D)   supply; rightE) C) and D)
F) A) and B)

Question 13

We don't typically see wages fall in response to an economic downturn because:

Accepted Answer

A)   labor supply adjusts so that the market stays at the original equilibrium wage level.
B)   there is often little change in the labor market in response to economic conditions.
C)   they are "sticky" and are slow to respond to shifts in the economy.
D)   the government sets tight regulations on how firms compensate their employees.E) A) and C)
F) None of the above

Question 14

In the United States, the working-age population does not include people:

Accepted Answer

A)   in the military.
B)   who are 16 years of age.
C)   who are 65 years of age.
D)   who do not have a driver's license.E) None of the above
F) A) and D)

Question 15

Wage stickiness in an economic downturn can result in:

Accepted Answer

A)   actual wages that are temporarily above the market-clearing level.
B)   cyclical unemployment.
C)   a surplus of labor.
D)   a shortage of labor.E) A) and C)
F) C) and D)

Question 16

Unemployment:

Accepted Answer

A)   wastes the productive potential of the economy.
B)   makes it easier for firms in other countries to find the labor they need.
C)   disproportionally affects highly educated workers.
D)   occurs most often during the summer.E) C) and D)
F) A) and C)

Question 17

The biggest benefit members of a union receive is:

Accepted Answer

A)   the ability to bargain as a group.
B)   the prevention of government regulation in certain industries.
C)   assurance that no employees will be forced to work overtime.
D)   access to discounts at local retailers.E) A) and D)
F) C) and D)

Question 18

In general, the role of unions in the United States labor market:

Accepted Answer

A)   has increased since the 1950s.
B)   has decreased since the 1950s.
C)   has stayed roughly the same since the 1950s.
D)   has been supported by federal legislation.E) A) and B)
F) A) and C)

Question 19

Cyclical unemployment:

Accepted Answer

A)   is caused by short-term economic fluctuations.
B)   results from a mismatch between the skills workers can offer and the skills demanded.
C)   results from workers changing their locations, jobs, or careers.
D)   is the effect of wages remaining persistently above the market-clearing level.E) A) and B)
F) B) and D)

Question 20

After an economic slowdown, the new equilibrium wage will be _______ because the labor demand curve shifts to the _______.

Accepted Answer

A)   lower; left
B)   higher; left
C)   lower; right
D)   higher; rightE) B) and D)
F) None of the above

Exam 9: Unemploymentand the Labor Market

In the United States, the working-age population does not include people:

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The biggest benefit members of a union receive is:

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Unemployment insurance:

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How would a new national policy that teaches technical skills to blue-collar workers affect the natural rate of unemployment?

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Employers choose to offer efficiency wages because they:

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After an economic slowdown, the new equilibrium wage will be _______ because the labor demand curve shifts to the _______.

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Carol is an autoworker who was laid off when the last factory in the area shut down. She has looked everywhere for another job as an autoworker, but cannot find one. Carol is:

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Cyclical unemployment:

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An economic slowdown would likely cause the labor _______ curve to shift to the _______.

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Which government office is in charge of collecting official employment statistics?

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Unions:

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During a recession, unemployment is:

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Real-wage unemployment:

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Unemployment:

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All else equal, if unemployment falls by 2 percentage points to 6 percent, this indicates that:

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Wage stickiness in an economic downturn can result in:

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When economists say wages are "sticky," they mean that wages:

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Real-wage unemployment can be caused by:

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We don't typically see wages fall in response to an economic downturn because:

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In general, the role of unions in the United States labor market:

Correct AnswerverifiedShow Answer

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After an economic slowdown, the new equilibrium wage will be _ because the labor demand curve shifts to the _.

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An economic slowdown would likely cause the labor _ curve to shift to the _.

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