Quiz 3 - Hitotsubashi University



Macroeconomics: Quiz 3

1) The natural rate of unemployment is:

a. The average rate of unemployment around which the economy fluctuates

b. About 15% of the labor force

c. A rate that never changes

d. The transition of individuals between employment and unemployment

2) One reason for unemployment is that:

a. All jobs are identical

b. The labor market is always in equilibrium

c. It takes time to match workers and job

d. 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. Insider unemployment

b. Voluntary unemployment

c. Frictional unemployment

d. Efficiency unemployment

4) When there is structural unemployment, the real wage is:

a. Rigid at a level below the market-clearing level

b. Rigid at a level above the market-clearing level

c. flexible

d. Rigid at the market-clearing level

5) Unemployment would decline in the face of rising productivity if:

a. Real wages only increased sluggishly

b. Real wages adjust instantaneously

c. The demand for labor did not respond to the rising productivity

d. Inflation rate declined

6) If [pic] is the rate of job separation, [pic] is the rate of job finding, and both rates are constant, then the unemployment rate is approximately:

a. [pic]

b. [pic]

c. [pic]

d. [pic]

7) All of the following are causes of structural unemployment except:

a. Minimum wage laws

b. The monopoly power of unions

c. Efficiency wages

d. Unemployment insurance

8) The Solow growth model describes:

a. How output is determined

b. The static allocation of economy’s output

c. How savings, population growth, and technological affect output over time

d. How unemployment is created

9) The major force of economic growth is:

a. Productivity growth

b. Money supply growth

c. Employment growth

d. Import growth

10) Under the Cobb-Douglas technology, GDP growth rate depends partly on :

a. Capital’s income share in total GDP alone

b. Labor’s income share in total GDP alone

c. Both capital’s and labor’s income shares in total GDP

d. 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

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