In the reference base year when the U.S. unemployment rule is zero when the U S.
ID: 1203640 • Letter: I
Question
In the reference base year when the U.S. unemployment rule is zero when the U S. economy is at full employment when the U S. inflation rate is zero The demand for labor curve shows the relationship between A the quantity of labour employed and firms profits all households' willingness to work and the real wag rate the quantity of labour businesses are willing to hire and the the labour force and the real wage rate The supply of labour is the relationship between the quantity of labour supplied and leisure time forgone the real wage rate and the quantity of labour supplied firms' willingness to supply jobs and the real wage rate the labour force participation rate and the real wage rate Households' labour supply decisions are influenced by all of the the opportunity cost of taking leisure and not working the after-tax wage rate unemployment benefits the number of full-time jobs available The full-employment quantity of labour increases if labour becomes more productive cannot increase because everyone who wants a job has one increases as the economy moves along its production function decreases if the income tax rate decreases The natural unemployment rate. increases if unemployment benefits become more generous increases in a recession increases as the average age of the labour force rises decreases as firms outsource manufacturing jobs Job rationing. increases the natural unemployment rate has no effect on the natural unemployment rate increases labour turnover as firms compete for high quality decreases the demand for labour, which lowers the real wage An efficiency wage results in all of the following except a decrease in the rate of labour turnover am increase in the full-employment quantity of labour greater work effort an increase in the cost of monitoring work effortExplanation / Answer
1.
Correct option: (C) when US economy is at full employment level
Potential GDP refers to the level of output or value of goods and services produced when inflation is constant and economy is at full employment level.
2.
Correct option: (C) the quantity of labor businesses are willing to hire and real wage rate
The labor demand curve shows how much labor is demanded and employed at the given real wage rate
3.
Correct option: (B) the real wage rate and quantity of labor supplied
The labor supply curve shows how much labor is supplied by households at the given real wage rate
4.
Correct option: (A) the opportunity cost of taking leisure
The opportunity cost of working is taken into account t, apart from the given options, and not the opportunity cost of not working.