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Flashcards in HW CH 7 Deck (15)
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1
Q

Suppose that over the course of a year 100 people are unemployed for 4 weeks each (the short-term unemployed), while 10 people are unemployed for 52 weeks each (the long-term unemployed). Approximately what percentage of the total spells of unemployment were attributable to the long-term unemployed?

A

9 percent.

2
Q

The earned income tax credit:

A

does not raise labor costs.

3
Q

Assume that a country experiences a reduction in productivity that lowers the marginal product of labor for any given level of labor. In this case, the:

A

labor demand curve shifts downward and to the left.

4
Q

More frequent holidays for workers in Europe than in the United States contribute to:

A

fewer hours worked per year by the average employed person in Europe than the average employed person in the United States.

5
Q

Workers unemployed as a result of wage rigidity are:

A

waiting for a job to become available

6
Q

Differences in unemployment rates across demographic groups are most closely correlated with differences in:

A

job-separation rates.

7
Q

Unemployment insurance increases the amount of frictional unemployment by:

A

softening the economic hardship of unemployment.

8
Q

The unemployment rate in the United States since 1952 has:

A

never been close to zero.

9
Q

All of the following are reasons for frictional unemployment except:

A

unemployed workers accept the first job offer that they receive.

10
Q

When insiders have a much greater impact on the wage-bargaining process than do outsiders, the negotiated wage is likely to be ______ the equilibrium wage.

A

much greater than

11
Q

Data on unemployment in the United States show that:

A

most weeks of unemployment are attributable to the long-term unemployed.

12
Q

European unemployment rates are positively correlated with each of the following except

A

the amount of coordination among employers in bargaining with unions.

13
Q

If the fraction of employed workers who lose their jobs each month (the rate of job separations) is 0.01 and the fraction of the unemployed who find a job each month is 0.09 (the rate of job findings), then the natural rate of unemployment is

A

10 percent.

14
Q

In a steady state:

A

the number of people finding jobs equals the number of people losing jobs.

15
Q

Government policies directed at reducing frictional unemployment include:

A

making unemployment insurance 100 percent experience rated.