Based on wage setting behaviour, we know that an increase in the unemployment rate will causeSelect one:A.a reduction in the real wage.B.an upward shift of the WS curve.C.an increase in the real wage.D.no change in the real wage.

Based on our understanding of the labour market model presented in Chapter 6, we know that an increase in the minimum wage will cause:Question 11Select one:a.a reduction in the equilibrium real wage.b.no change in the equilibrium real wage.c.an increase in the equilibrium real wage.d.no change in the natural rate of unemployment.e.a reduction in the natural rate of unemployment.

A rising unemployment rate affects a society by:A.reducing the value of a country's currency.B.making it harder for citizens to find jobs.C.discouraging businesses from investing.D.causing inflation rates to rise rapidly.

Based on our understanding of the labour market model presented in Chapter 7, we know that a reduction in the markup will causeSelect one:A.an increase in the equilibrium real wage.B.a reduction in the natural rate of unemployment and no change in the real wage.C.a reduction in the equilibrium real wage.D.an increase in the natural rate of unemployment.

During a recession the demand for labor falls. The sticky wages theory suggestsMultiple choice question.employers will not adjust their demand for labor.employers will hire more workers.unemployment will be greater than if the wage rate adjusted downward.unemployment will be less than if the wage rate adjusted downward.

Suppose policy makers underestimate the natural rate of unemployment. In situations like these, policy makers will likely implement policies that result inSelect one:A.a higher inflation rate than necessary.B.an unemployment rate that is "too high."C.overly contractionary monetary and fiscal policy.D.a steadily decreasing inflation rate.E.more unemployment than necessary.