Explain how each of the following affects the natural rate of unemployment: a . the introduction of unemployment programs that temporarily replace lost income for unemployed workers b. government funding for campus career placement centers that teach
students how to write resumes and interview, and that schedule and coordinate on-campus interviews with potential employers c. government legislation that mandates that large employers hold jobs for employees who leave to take care of infants or sick family members
a . These programs reduce the cost of remaining unemployed, and so tend to increase the natural rate of
unemployment by increasing the frictional component.
b. Career placement centers lower the costs of searching for a job and shorten the time that available
members of the labor force are unemployed. This lowers the natural rate of unemployment by
decreasing the frictional component.
c. This legislation allows workers to care for infants and sick family members without giving up their
jobs. Since these workers are less likely to leave the labor force, they won't have to return to the labor
force when they finish their duties at home and perhaps experience a period of frictional
unemployment. This reduces the natural rate of unemployment by reducing the frictional component.
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Which of the following is not a valid criticism of Fogel's (1964) methodology in his study of railroads?
(a) The canal prices used for 1890 were low. (b) The impact of railroads on financial markets is ignored. (c) The nonpecuniary gains from using railroads could have been considered. (d) The amount of land cultivated would have been reduced.
The above figure shows the market for rice in Japan. S2 represents the domestic supply curve, and S1 represents the world supply curve. Suppose a free market exists. The smallest tariff necessary to completely eliminate imported rice is
A) $1 per unit. B) $2 per unit. C) $3 per unit. D) $4 per unit.
Why do negative supply shocks present such a difficulty for the Federal Reserve?
a. the Fed can choose to fight the rising price level, but this will result in lower unemployment. b. the Fed can choose to fight the rising unemployment, but this will result in an even lower price level. c. the Fed can choose to fight the falling unemployment, but this will result in an even higher price level. d. the Fed can choose to fight the rising unemployment, but this will result in an even higher price level. e. the Fed can choose to fight the rising unemployment, but this will result in higher taxes.
Which one of the following would create a demand for a foreign currency and supply of dollars in the foreign exchange market?
a. the spending of French tourists in the United States b. the purchase of Japanese automobiles by American consumers c. the sale of U.S. computer equipment to a French buyer d. the purchase of a U.S. shoe factory by a Mexican investor