1.Suppose that Treasury estimates that in the June 2013 quarter cyclical unemployment was equal to 3%, frictional unemployment was equal to 2% and structural unemployment was equal to 2%. What is the natural rate of unemployment?

Select one:

a.2%.

b.3%.

c.4%.

d.8%

2.Which of the following people would be counted in the officially unemployed statistics?

Select one:

a.Gemma has just left university. She has a part time job in a trading bank but wants a full time job and is actively seeking one.

b.Tim is currently not working but he is due to start a new job in the next week or so.

c.Samantha was recently made redundant. She doesn't have a job and would take one if offered. She looks in the newspaper from time to time.

d.Jesse isn't currently working and is looking for a job as a builder. He has been sending out his CV to building companies and is keen to start.

3.Why might firms voluntarily pay above equilibrium wage rates?

Select one:

a.To claim higher tax rebates.

b.Union power.

c.They are unsure what the equilibrium wage rate is.

d.To reduce worker turnover.

4.The 1991 Employment Contracts Act

Select one:

a.reduced labour market flexibility.

b.introduced minimum wages

c.ensured that workers could seek a collective employment contract but they had to be part of a union to do so.

d.changed the focus from centralised wage setting to the employer/employee relationship.