Search Theory

Question 1

Search is a _______ that can explain unemployment

Answer 1

friction

Question 2

Search is the time taken for an individual to ______ and a firm to _______

Answer 2

find a suitable job; fill a vacancy

Question 3

Unemployment rate = ____

Answer 3

U/ (U + E)

Question 4

Labour force is _____

Answer 4

U + E

Question 5

Participation rate = _____

Answer 5

(U + E)/ (U + E + NL)

Question 6

Participation rate is the share of ________ that is participating in the ______

Answer 6

working-age population; labour force

Question 7

Employment-population rate =

Answer 7

E/ (E + U + NL)

Question 8

Vacancy rate =

Answer 8

V / (E + V)

Question 9

Unemployment rate is _______ (moves opposite to GDP) and _______

Answer 9

countercyclical; lagging

Question 10

Participation rate has been ________ since late 1940s to 2000 and then ______

Answer 10

increasing; decreasing

Question 11

Men’s participation rate has been ________ throughout late 1940s to 2016 while women’s has been ______. Thus, ____ have contributed most to overall participation rate.

Answer 11

decreasing; increasing till 2000 and then decreasing; women

Question 12

Participation rate is ______ but ____ volatile than GDP and ________

Answer 12

procyclical; less; employment-population rate

Question 13

Vacancy rate is ______ (relation to GDP)

Answer 13

procyclical

Question 14

Vacancy rate and unemployment rate are ______ related

Answer 14

negatively

When vacancy rate increases, the no of unfilled jobs is high. Because most people are already employed and thus employment rate is low.

Question 15

Beveridge curve shifted ____ around _______

Answer 15

right; December 2009