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Sample Questions Ch. 9-12

Sample Questions Ch. 9-12 - Sample Questions Part 2...

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Sample Questions, Part 2, Chapters 9-12 Spring 2007 Chapter 9 [1]The economic expansion that began in 1991 1. lasted approximately five years 2. lasted approximately twelve years 3. is still ongoing 4. was the longest expansion in U.S. history [2]What would a rightward shift of the labor demand curve indicate? 1. Firms want to hire more workers than before at any given wage rate. 2. Households want to supply more hours of work than before at any given wage rate. 3. Firms want to pay a lower wage rate than before at any given level of employment. 4. Households want to supply fewer hours of work than before at any given wage rate. [3]Which of the following could explain a leftward shift of the labor demand curve? 1. Firms are unable to sell all the output they produce. 2. Workers have become less productive. 3. Workers have become more productive. 4. Both (a) and (b) are correct. [4]In the classical model, an increasing demand for labor will 1. cause an expansion with higher employment and a higher real wage 2. cause a shortage of labor because the labor market always clears 3. cause a recession with lower employment and a lower real wage 4. cause a recession because wages are fixed in the short run [5]According to the textbook, the classical model does a poor job of explaining the __________ because it assumes that the __________ always clears. 1. long run; labor market 2. long run; financial market 3. short run; labor market 4. short run; financial market [6]In Freedonia there is an increase in the real price of a key raw material, say, for example, oil. Using the analysis developed in class, in the classical model which of the following occurs? 1. The will be an increase in the demand for labor. 2. There will be a decrease in equilibrium output. 3. There will be an increase in the equilibrium real wage. 4. Each of 1-3 will occur. 5. Neither of 1-3 will occur.
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