Questions

Define: unemployed, employed, labor force participation rate, natural rate of unemployment, full employment.

What are frictional, structural, and cyclical unemployment?

What is the function of government employment agencies?How do they promote employment? How do they promote unemployment?

Give three explanations why the real wage may stay above the level that equilibrates labor supply and labor demand.

Suppose that a country experiences a reduction in productivity--that is, an adverse shock to the production function.
a. What happens to the labor demand curve?
b. How would this change in productivity affect the labor market--that is, employment, unemployment, and real wages--if the labor market was always in equilibrium?
c. How would this change in productivity affect the labor market if unions prevented real wages from falling?