In an article in an academic journal, Victor Ortego-Marti of the University of California at Riverside found that, "The rate of skills loss is around 3 times larger for workers employed as professionals, technical workers, sales workers, managers and officials, compared to workers employed as craftsmen, foremen and operatives."

Part 1a. Suppose the U.S. economy experiences a severe recession. Would you expect that workers in occupations that require greater skills or training to have more difficulty or less difficulty in finding a job after the recession ends than would workers in occupations that require fewer skills or training, holding all other factors constant?

A.

More difficulty, if these skilled occupations have experienced a permanent reduction in the number of workers employedfor example, a declining industry reduces the number of jobs available.

B.

More difficulty, if workers are unemployed for a significant period of time, their skills, especially in high-technology fields, may deteriorate, thereby reducing the normal advantages they may have in finding a new job.

C.

Less difficulty, since the greater the skills a worker has, the fewer other workers who are able to compete with the worker for job openings.

D.

Only A and B are correct.

E.

All of the above are correct.

Part 1b. What additional information would you need to make it easier to answer the question?

A.

Information regarding workers' ability to understand monetary policy would make it easier to answer the question.

B.

Information on workers' preferences for unemployment compensation would make it easier to answer the question.

C.

Information on the effect of the recession on different occupations would make it easier to answer the question.

D.

Information on workers' expectations about future wage rates would make it easier to answer the question.

Part 2a. Suppose that jobs in the United States require increasing amounts of skill. How might that fact affect monetary policy?

b. If jobs in the United States require increasing amounts of skill, unskilled workers may have_____

difficulty finding jobs.

A. Less

B. Greater

c.As a result, the level of structural unemployment may (a) _______thereby (b) ______the natural rate of unemployment.

(a)

A.increase

B.decrease

(b)

A. increasing

B. decreasing