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Macroeconomics: Quiz 3
(1) The natural rate of unemployment is:
a.
b.
c.
d.
The average rate of unemployment around which the economy fluctuates
About 15% of the labor force
A rate that never changes
The transition of individuals between employment and unemployment
(2) One reason for unemployment is that:
a.
b.
c.
d.
All jobs are identical
The labor market is always in equilibrium
It takes time to match workers and job
A laid-off worker can immediately find a new job at the market wage
(3) Unemployment caused by the time it takes workers to search for a job is called:
a.
b.
c.
d.
Insider unemployment
Voluntary unemployment
Frictional unemployment
Efficiency unemployment
(4) When there is structural unemployment, the real wage is:
a.
b.
c.
d.
Rigid at a level below the market-clearing level
Rigid at a level above the market-clearing level
flexible
Rigid at the market-clearing level
(5) Unemployment would decline in the face of rising productivity if:
a.
b.
c.
d.
Real wages only increased sluggishly
Real wages adjust instantaneously
The demand for labor did not respond to the rising productivity
Inflation rate declined
(6) If s is the rate of job separation, f is the rate of job finding, and both rates are
constant, then the unemployment rate is approximately:
f
s f
f s
b.
f
a.
s
s f
s f
d.
s
c.
(7) All of the following are causes of structural unemployment except:
a.
b.
c.
d.
Minimum wage laws
The monopoly power of unions
Efficiency wages
Unemployment insurance
(8) The Solow growth model describes:
a.
b.
c.
d.
How output is determined
The static allocation of economy’s output
How savings, population growth, and technological affect output over time
How unemployment is created
(9) The major force of economic growth is:
a.
b.
c.
d.
Productivity growth
Money supply growth
Employment growth
Import growth
(10) Under the Cobb-Douglas technology, GDP growth rate depends partly on :
a.
b.
c.
d.
Capital’s income share in total GDP alone
Labor’s income share in total GDP alone
Both capital’s and labor’s income shares in total GDP
None of the above
Answers
(1) a
(2) c
(3) c
(4) b
(5) a
(6) c
(7) d
(8) c
(9) a
(10) c