Question

QUESTION 13

1. Under an unemployment insurance system that uses no experience rating, the cost to a firm in increased unemployment insurance taxes of laying off a worker would a. equal zero.

   		equal zero (0)
   		equal the unemployment insurance benefits paid to the worker.
   		equal approximately 50 percent of the benefits paid to the worker.
   		equal approximately 50 percent of the worker’s previous earnings.

QUESTION 14

1. Fifty million people were employed last month, and 2 percent of the employed workers have become unemployed this month. The number of workers who transitioned from employment to unemployment is

   		1 million people
   		2 million people
   		5 million people
   		10 million people

QUESTION 15

1. Which of the following is not a commonly used definition of the full-employment (natural) rate of unemployment?

   		The unemployment rate that prevails in normal times
   		The unemployment rate where the number of job vacancies equals the number of new labor force entrants
   		The unemployment rate associated with zero excess demand for labor
   		The unemployment rate at which all unemployment is voluntary

QUESTION 16

1. A person who searches for a job sequentially

   		searches while employed
   		accepts the first job offer
   		accepts the best job offer after applying for a pre-specified number of jobs
   		accepts or rejects job offers as they arrive

Answer 1

Answer 13 - correct option is A

Reason - under unemployment insurance system that uses no experience rating , then cost in increases unemployment insurance taxes layoff a worker will be equal to zero because unemployment insurance will not rise as a result of layoff

Answer 14 - option A is correct

Reason - number of workers transmitted from employment to unemployment will be

50 million × 2% = 1 million people

Answer 15 - correct option is C

Reason - unemployment rate associated with excess demand of labour is not used in the defination of full employment rate of unemployment

Answer 16 - correct option is B

Reason - a person who is already employed then searces for the job which will be more profitable to him that is who will pay him more wage rate therefore he will accepts the best job offer after applying the pre specificed job offer