Equilibrium unemployment refers to unemployment that A) arises in a cyclical downturn. B) occurs when trade unions set wages at too high a level. C) persists when the aggregate demand for labour is equal to the aggregate supply. D) can only occur when aggregate demand equals aggregate supply. E) occurs
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Equilibrium
A) arises in a cyclical downturn.
B) occurs when trade unions set wages at too high a level.
C) persists when the aggregate demand for labour is equal to the
D) can only occur when aggregate demand equals aggregate supply.
E) occurs due to a lack of aggregate demand..
Step by step
Solved in 2 steps
- A) B) structural unemployment C) cyclical unemployment frictional unemployment D) Ceteris paribus, if an 8 percent increase in price leads to a 6 percent increase in the quantity supplied, how would supply be described? A) Supply is inelastic. B) Supply is elastic. C) Supply is unit elastic. The supply curve is perfectly vertical. D) Cost (in dollars) Which of the following does NOT occur in an economy experiencing full employment? underemployment A) B) C) D) This figure shows the long-run average total cost curve for a firm that produces basketballs, along with four short-run average total cost curves. Each of the short-run average total cost curves corresponds to a different plant size. SRATC1 corresponds to Plant size 1, SRATC2 corresponds to Plant size 2, and so forth. FIGURE 7-5 Refer to the figure. What is the total cost of producing 500 basketballs per week, assuming the firm uses the optimal plant size for producing that quantity of output? $500 SRATC $22 500 $13 500 $5000…4) An increase in the minimum wage will cause: A) a reduction in the equilibrium real wage. B) an increase in the natural rate of unemployment. C) an increase in the equilibrium real wage. D) a decrease in the natural rate of unemployment. E) no change in the natural rate of unemployment.The natural rate of unemployment refers to unemployment that a) occurs when trade unions set wages at too high a level b) persists when the aggregate labour market is in equilibrium. c) occurs due to a lack of aggregate demand. d) arises in a cyclical downturn.
- In which of the following cases will we observe unemployment? the quantity of labor demanded is greater than the quantity of labor supplied at the going wage rate. the wage is below the level that balances supply and demand for labor. there is a shortage of workers. the quantity of labor demanded is less than the quantity of labor supplied at the going wage rate.If the rate of separation is 10% and the rate of finding a job is 20%, then the equilibrium unemployment rate is a) 33.33% b) 50.00% c)) 66.67% d) 100.00% 2) When there is an increase in the rate of unionization in an economy, then a) frictional unemployment increases. b) the natural rate of unemployment increases. c) both a) and b) are correct. d) neither a) nor b) are correct. 3) If the Philips curve is ?? = ????- 3(?? - ?? ??) + ?? and there are no supply shocks. If monetary policy's target is 6%, the natural rate of unemployment is 6%, and inflation has been 9%, what does the unemployment rate have to be to achieve their target? a) 3% b) 6% c) 7% d) 9% 4) If the sacrifice ratio is estimated to be 3, then to reduce inflation by 3 percentage points, would require a) a total output increase of 1% v. b) a total output increase of 9%. c) a total output decrease of 1%. d) a total output decrease of 9%. 5) Which of the following would be an explanation for a hysteresis effect that…Technological innovation shifts upwards the productivity and price setting curves. This always results in a lower equilibrium unemployment rate both immediately and in the longer term. True. In the long run unemployment will fall. False, the outcome depends also on the wage setting process. If unions demand higher wages, then this may shift outwards the wage setting curve, resulting in higher unemployment, at least in the short run.
- If the wage is above the equilibrium wage because of a binding minimum wage, the result cyclical unemployment O structural unemployment O seasonal unemployment O frictional unemploymentThe contraction of sugar industry idles cane cutters while the demand for It workers remain unchanged. The cane cutters are: a) structurally unemployed b) seasonally unemployed c) frictionally unemplyed d) not in the labour force e) cyclically unemployedA production function has two inputs: domestic labor (Edom) and foreign labor (Efor.) The market is originally in equilibrium as shown below, and the production budget is fixed. Suppose a shock occurs that increases the marginal product of domestic labor. Assuming no changes in domestic or foreign wages, what will happen to the quantities of domestic and foreign labor employed? Initial long run equilibrium (prior to shock): a. The firm will hire more domestic workers and fewer foreign workers. b. The firm will hire more foreign workers and fewer domestic workers. c. The firm will hire more domestic workers but will continue to hire the same number of foreign workers. d.The firm will hire more foreign workers but will continue to hire the same number of domestic workers.
- QUESTION FOUR a) In words, explain the difference between real and nominal wages. b) Discuss the relationship between slope and elasticity of labour demand curve.c) Suppose a firm purchases labour in a competitive labour market and sells its product in a competitive product market. The firm’s elasticity of demand for labour is 0.4. Suppose further that the wage increases by 5 percent. What will happen to the amount of labour hired by the firm?Suppose the world price of cotton falls substantially. The demand for labor among cotton-producing firms in Texas will . The demand for labor among textile-producing firms in South Carolina, for which cotton is an input, will . The temporary unemployment resulting from such sectoral shifts in the economy is best described as unemployment. Suppose the government wants to reduce this type of unemployment. Which of the following policies would help achieve this goal? Check all that apply. Taxing the price of placing a resume or posting a job opening on a job-search website Offering recipients of unemployment insurance benefits a cash bonus if they find a new job within a specified number of weeks Improving a widely used job-search website so that it matches workers to job vacancies more effectivelySuppose the world price of cotton falls substantially. The demand for labor among cotton-producing firms in Texas will . The demand for labor among textile-producing firms in South Carolina, for which cotton is an input, will The temporary unemployment resulting from such sectoral shifts in the economy is best described as unemployment. Suppose the government wants to reduce this type of unemployment. Which of the following policies would help achieve this goal? Check all that apply. Extending the number of weeks for which unemployed workers are eligible for unemployment insurance benefits from the government Establishing government-run employment agencies to connect unemployed workers to job vacancies Offering recipients of unemployment insurance benefits a cash bonus if they find a new job within a specified number of weeks