Unemployment insurance contributes to structural unemployment by:
A. keeping wages below the market-clearing level.
B. keeping wages above the market-clearing level.
C. allowing unemployed workers to search longer or less intensively for jobs.
D. forcing unemployed workers to take the first job offered to them.
Answer: C
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The theory of investment that links investment spending to stock prices is known as the
A) multiplier model. B) accelerator model. C) neoclassical theory of investment. D) Q-theory of investment.
Friedman and Schwarz argue that money is not neutral because
A) theoretical models of the economy don't show monetary neutrality. B) money is a leading, procyclical variable. C) they found several historical incidents in which changes in the money supply were not responses to macroeconomic conditions, and output moved in the same direction as money. D) they found no evidence that productivity changes or changes in government spending contributed to business cycles; only monetary changes preceded every recession.
Mathematically, price elasticity of demand is the percentage change in the:
A. quantity demanded of a good in response to a given percentage change in the price of the good. B. price of a good that is demanded in response to a given percentage change in quantity. C. quantity of a good that is supplied in response to a given percentage change in price. D. price of a good that is supplied in response to a given percentage change in quantity.
Those who oppose minimum wage legislation argue that:
A. workers deserve a basic standard of living. B. setting a wage above the market-clearing equilibrium creates unemployment. C. the way to get an efficient labor market is for government intervention. D. it should be set below the market-clearing equilibrium.