Question 1

If productivity growth accelerates, but workers do not realize it ________.

Accepted Answer

If productivity growth accelerates but workers do not realize it, they will not expect large wage hikes. They may continue to demand wages based on their current level of productivity, which would lead to a lower labor cost for firms and potentially lower prices for consumers.

Question 2

Many economists view ________ as explaining most of the increase in the natural rate of unemployment in the U.S. from 1960 to 1980.

Accepted Answer

The rise in the percentage of young workers in the labor force is viewed by many economists as explaining most of the increase in the natural rate of unemployment in the U.S. from 1960 to 1980. This is because young workers tend to have less experience and skills, making them less competitive in the job market and contributing to higher unemployment rates.

Question 3

Which of the following does not influence the natural rate of unemployment in the U.S.?

Accepted Answer

The natural rate of unemployment may be influenced by demographics (such as age and education levels), the composition of the labor force (such as the percentage of workers in different industries), and productivity growth. However, the natural rate in Europe and Japan, while potentially interesting or relevant for comparisons, is not a direct influence on the natural rate in the U.S.

Question 4

A classic early example of efficiency wages came in ________.

Accepted Answer

The classic early example of efficiency wages came in 1914 at the Ford Motor Company, where Henry Ford famously paid his workers $5 a day, which was more than double the prevailing wage at the time. By paying his workers more than they could earn elsewhere, Ford was able to attract a higher caliber of worker, reduce turnover, and increase productivity, leading to overall cost savings and higher profits. This concept of paying workers a wage above the market rate to increase productivity became known as efficiency wages.

Question 5

Typically, employers compete with each other in the labor market to get and to retain the best possible workers. Explain how such competition might prevent the unemployment rate from ever being close to zero.

Accepted Answer

The answer of Typically, employers compete with each other in...

Question 6

Suppose researchers discover that a government program to match job seekers and employers has caused an increase in the unemployment rate. Does this mean that the program has failed?

Accepted Answer

The answer of Suppose researchers discover that a government program...

Question 7

An increase in the prison population would tend to cause, other things the same, a decrease in ________.

Accepted Answer

With an increase in the prison population, more people are removed from the labor force, which would decrease the natural rate of unemployment.

Question 8

Katz and Krueger found that minimum wage laws had a negligible impact on teenage unemployment in the fast-food industry. Describe the characteristics of labor demand and supply that might produce such a result.

Accepted Answer

The answer of Katz and Krueger found that minimum wage...

Question 9

Between 1980 and 2010, the share of temporary workers in total U.S. employment ________.

Accepted Answer

The share of temporary workers in total U.S. employment rose.

Question 10

The natural rate of unemployment ________.

Accepted Answer

The natural rate of unemployment is generally higher in Europe than in the United States, mainly due to more generous social safety nets and employment protection legislation in Europe. Therefore, choice D is the best answer. Choice A is incorrect because it assumes that the natural rate of unemployment is the same in both regions, which is not accurate. Choice B is also incorrect because it has the opposite relationship between the two regions. Choice C is not applicable, as there is no evidence to suggest that the natural rate of unemployment cannot be calculated for European economies.

Question 11

Which of the following is likely to cause a decrease in the natural rate of unemployment?

Accepted Answer

The answer of Which of the following is likely to...

Question 12

The process of bargaining for a large group of workers at one time rather than individually is known as ________.

Accepted Answer

Collective bargaining is the process by which labor unions negotiate with employers on behalf of all the workers in the union, rather than negotiating individually. Autarky is a term used to describe economic self-sufficiency, not related to labor negotiations. Tertiary negotiations and ornamental horticulture are unrelated to the question.

Question 13

Which of the following is not an aspect of the composition of the labor force?

Accepted Answer

The natural rate of unemployment refers to the level of unemployment that exists due to normal fluctuations in the economy, such as job turnover and the time it takes for workers to find new jobs. It is not an aspect of the composition of the labor force. A, B, and C are all examples of factors that can affect the composition of the labor force, as they relate to the size and characteristics of the population of workers available for employment.

Question 14

Workers who suffer disability are likely to suffer higher ________.

Accepted Answer

Structural unemployment is caused by a mismatch between the skills or location of workers and the requirements of available jobs. Disability can result in a mismatch between a worker's abilities and the job market, leading to difficulty in finding and keeping employment, and hence, structural unemployment. Cyclical unemployment refers to unemployment caused by fluctuations in the business cycle, tertiary unemployment refers to job losses due to changes in the economy, and natural unemployment is the minimum level of unemployment that exists even during periods of economic growth.

Question 15

People who end up in prison are particularly subject to ________.

Accepted Answer

People who end up in prison may have difficulty finding employment even after being released due to factors such as a criminal record, lack of current job skills, and discrimination from employers. This is an example of structural unemployment, which is caused by a mismatch between the skills of job seekers and the requirements of available jobs.

Question 16

In the wake of Henry Ford's payment of efficiency wages in 1914 ________.

Accepted Answer

Henry Ford's payment of efficiency wages led to a decrease in absenteeism and an increase in productivity. This was because workers were motivated to work harder and show up to work consistently in order to maintain their higher wages.

Question 17

When productivity growth has been rapid and then slows, the natural rate of unemployment is likely to ________.

Accepted Answer

When productivity growth slows down, firms tend to produce less output per worker. As a result, they require fewer workers to produce the same amount of output. This leads to job losses and an increase in the natural rate of unemployment.

Question 18

Efficiency wages are ________.

Accepted Answer

Efficiency wages are wages that are above the market-clearing level. This is because employers pay higher wages as an incentive for workers to be more productive and efficient. This can lead to reduced turnover and absenteeism, and higher morale and effort among employees.

Question 19

The actual unemployment rate is equal to ________.

Accepted Answer

The actual unemployment rate is equal to the natural rate of unemployment (which includes frictional and structural unemployment) plus the cyclical unemployment rate, which fluctuates with the business cycle.

Question 20

The natural rate of unemployment ________.

Accepted Answer

The natural rate of unemployment varies across time and countries. It is not a constant and is not equal to a specific percentage like 0.078 percent (Option A). It is also not equal to the cyclical rate of unemployment divided by the actual rate (Option D).

Quiz 20: The Labor Market, Employment, and Unemployment

If productivity growth accelerates, but workers do not realize it ________.

Many economists view ________ as explaining most of the increase in the natural rate of unemployment in the U.S. from 1960 to 1980.

Which of the following does not influence the natural rate of unemployment in the U.S.?

A classic early example of efficiency wages came in ________.

Typically, employers compete with each other in the labor market to get and to retain the best possible workers. Explain how such competition might prevent the unemployment rate from ever being close to zero.

Suppose researchers discover that a government program to match job seekers and employers has caused an increase in the unemployment rate. Does this mean that the program has failed?

An increase in the prison population would tend to cause, other things the same, a decrease in ________.

Katz and Krueger found that minimum wage laws had a negligible impact on teenage unemployment in the fast-food industry. Describe the characteristics of labor demand and supply that might produce such a result.

Between 1980 and 2010, the share of temporary workers in total U.S. employment ________.

The natural rate of unemployment ________.

Which of the following is likely to cause a decrease in the natural rate of unemployment?

The process of bargaining for a large group of workers at one time rather than individually is known as ________.

Which of the following is not an aspect of the composition of the labor force?

Workers who suffer disability are likely to suffer higher ________.

People who end up in prison are particularly subject to ________.

In the wake of Henry Ford's payment of efficiency wages in 1914 ________.

When productivity growth has been rapid and then slows, the natural rate of unemployment is likely to ________.

Efficiency wages are ________.

The actual unemployment rate is equal to ________.

The natural rate of unemployment ________.