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| 1 | |
In the twentieth century, average real wages have risen substantially: |
| | A) | only in the United States. |
| | B) | in industrial countries excluding the United States |
| | C) | in industrial countries including the United States |
| | D) | in neither the United States nor other industrial countries. |
| | E) | in the United States, but not in other industrial countries. |
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| 2 | |
In the United States the real wages of the least-skilled, least educated workers have ____ and the wages of best-educated, highest skilled workers have ______. |
| | A) | increased; increased |
| | B) | declined; increased |
| | C) | increased; declined |
| | D) | declined; declined |
| | E) | declined; remained constant |
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| 3 | |
According to the principle of diminishing returns to labor, if the amount of capital and other inputs are held constant, employing additional workers: |
| | A) | increases output at an increasing rate. |
| | B) | increases output at a constant rate. |
| | C) | increases output at a decreasing rate. |
| | D) | decreases output at an increasing rate. |
| | E) | decreases output at a decreasing rate. |
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| 4 | |
The slowdown in the growth of real wages in the United States since 1973, accompanied with job growth is consistent with _______ in the growth of labor demand and ________ growth of labor supply. |
| | A) | slower; slower |
| | B) | slower; faster |
| | C) | slower; no change in |
| | D) | faster; faster |
| | E) | faster; slower |
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| 5 | |
Initially workers in the shoe industry and the computer industry earn the same wage. Reductions in trade barriers give domestic consumers access to cheaper shoes produced abroad, so domestic shoe prices fall. At the same time foreign consumers purchase more computers, raising the relative price of computers. As a result of these changes employment in the shoe industry ____ and employment in the computer industry ______. |
| | A) | increases; increases |
| | B) | increases; decreases |
| | C) | decreases; increases |
| | D) | decreases; does not change |
| | E) | decreases; decreases |
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| 6 | |
Frictional unemployment occurs because: |
| | A) | workers face language barriers and discrimination |
| | B) | labor markets are heterogeneous and dynamic |
| | C) | structural barriers such as unions and minimum wage laws keep wages too high to clear the labor market. |
| | D) | there are long-term mismatches between workers skills and jobs available. |
| | E) | the economy is experiencing a period of unusually low production. |
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| 7 | |
Unemployment insurance contributes to structural unemployment by: |
| | A) | keeping wages above the market-clearing level. |
| | B) | keeping wages below 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. |
| | E) | preventing unemployed workers from searching for new jobs. |
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| 8 | |
Holding other factors constant, if a larger proportion of the population enters the labor force as a result of a growing social acceptance of women working, then the real wages of workers will _____ and employment of workers will _____. |
| | A) | increase; increase |
| | B) | increase; decrease |
| | C) | decrease; not change |
| | D) | decrease; decease |
| | E) | decrease; increase |
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| 9 | |
Large productivity gains explain: |
| | A) | increasing wage inequality. |
| | B) | the slowdown in real wage growth in the 1970s. |
| | C) | the long-term increase in real wages. |
| | D) | high unemployment in Western Europe. |
| | E) | skill-based technological change. |
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| 10 | |
More rigid government regulations and union contracts in Western Europe contribute to greater _____ in Western Europe than in the United States. |
| | A) | real GDP per capita. |
| | B) | employment growth. |
| | C) | real wage growth |
| | D) | wage inequality |
| | E) | unemployment |
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