Which of the following statements is false? Sticky wage theories presume that the main cause of unemployment is the existence of wage rigidities. Sticky wage theories explain frictional, structural and cyclical unemployment. Union bargaining theory is an example of a sticky wage theory. None of the above statements are false.

Robert applied for a job as a machine technologist. Due to his low level of skills in operating heavy duty machinery, Robert was not able to land the job. This type of unemployment is considered:     Frictional      Structural      Seasonal      Cyclical      None of the above

Firms in the country of Merka, which experiences varying levels of unemployment over time, face a very competitive labor market. Classify the given events according to how each would affect Merka's unemployment rate. Increase in the unemployment rate Decrease in the unemployment rate Answer Bank decreased unemployment benefits increase in the minimum wage introduction of employment-at-will doctrine increase in unions' influence

The labour market in an economy is characterised by the following equations: Wage setting: Price setting: W p² W Р = 0.9-0.5u = 1 1+µ -A In which W is nominal wages, pe and P are expected nominal prices and nominal prices, respectively, u is level of unemployment. µ is the price mark-up and λ is the marginal product of labour. Assume μ = 0.3 and λ = 1.1 Considering this information, which of the following statements are CORRECT: Improvement in working conditions will have no effects in the equilibrium level of unemployment in this economy. If this economy's actual output is below its potential output, there is pressure for real wages to decrease below 0.85 (i.e., W<0.85). If price marginal product of labour decreases to 1, the equilibrium real wage in this economy will decrease. A positive demand shock will change the equilibrium variables in this economy.