Question : 81) An increase in the rate of aggregate economic growth : 1384497

81) An increase in the rate of aggregate economic growth usually speeds up the rate of change in the structure of labour demand. As a result, we can expect that structural unemployment will ________, and will therefore cause the NAIRU to ________.

A) decrease; increase

B) decrease; decrease

C) remain constant; remain constant

D) increase; increase

E) increase; decrease

82) Economic models in which the NAIRU can be influenced by changes in the actual rate of unemployment are said to include

A) demographic shifts.

B) efficiency-wage behaviour.

C) hysteresis.

D) labour-market clearing.

E) rational expectations.

83) In macroeconomic models, the idea that NAIRU can be influenced by the actual rate of unemployment is referred to as

A) efficiency-wage unemployment.

B) hysteresis.

C) the market-clearing theory.

D) rational expectations.

E) the Phillips curve.

84) A good example of an outcome that could lead to “hysteresis” in the labour market is

A) new entrants to the labour market have a high rate of unemployment due to technological change.

B) new entrants to the labour market have difficulty finding jobs, and as a result have a higher rate of unemployment throughout their working lives.

C) unemployment is generated by an increase in the minimum wage.

D) a negative supply shock persists.

E) a negative demand shock persists.

85) A decrease in the share of the labour force that is unionized may ________ the degree of wage flexibility, which would put ________ pressure on NAIRU.

A) increase; upward

B) increase; downward

C) decrease; upward

D) decrease; downward

E) have no effect on; no

86) If there were an increase in the share of the labour force that is unionized, it would likely lead to ________ wage flexibility, which would ________ the NAIRU.

A) more; increase

B) more; decrease

C) less; increase

D) less; decrease

E) less; not change

87) The NAIRU is likely to be affected by all of the following EXCEPT

A) a demographic shift.

B) employment insurance.

C) globalization.

D) labour-market flexibility.

E) recession.

88) In some European countries, labour-market policies make it very costly for firms to lay off or fire workers. Theory and evidence tells us that

A) European unemployment is lower because workers are less likely to lose their jobs during an economic downturn.

B) these policies have no effect on wages or employment in the long run.

C) the European experience is more consistent with market-clearing theories of unemployment than that of Canada or the United States.

D) these policies reduce labour-market flexibility and tend to increase unemployment.

E) cyclical unemployment will always be higher in these European countries than in Canada or the United States.

89) Unemployment rates among workers in the 15-24 age group tend to be ________ the overall unemployment rate. An influx of workers of this age group into the labour force would tend to ________ the NAIRU.

A) higher than; increase

B) higher than; decrease

C) lower than; increase

D) lower than; decrease

E) the same as; not change

90) The ongoing process of globalization of the world economy has an effect on the NAIRU in Canada. Choose the statement that best describes the likely effect.

A) Since globalization has brought net economic benefits to Canada, it follows that the NAIRU must be decreasing.

B) Canadian labour markets increasingly need to adjust to changing supply and demand conditions around the world. These ongoing adjustments tend to increase the NAIRU.

C) Because Canada is experiencing greater trade with the rest of the world, the increasing demand for exports puts upward pressure on the demand for labour in Canada and thus tends to decrease the NAIRU.

D) Canada’s labour market is increasingly connected to labour markets in other parts of the world and the NAIRU in Canada tends to adjust to the same levels as those of our trading partners.

E) Globalization has meant that Canadian labour markets are less exposed to economic fluctuations elsewhere in the world, which has decreased the NAIRU.