Macroeconomics 2nd Edition Jones Test Bank Full Chapter PDF

Macroeconomics 2nd Edition Jones
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CHAPTER 7 The Labor Market, Wages, and Unemployment
MULTIPLE CHOICE
1. The quote “It’s a recession when your neighbor loses his job; it’s a depression when you
lose yours” is attributed to:
a. Karl Marx.
b. Franklin D. Roosevelt.
c. John Maynard Keynes.
d. Harry S Truman.
e. Alan Greenspan
ANS: D REF: Section 7.1 TOP: Factual
2. Over the course of his or her lifetime, the average American worker will spend __________
hours on the job.
a. 40,000
b. 1 million
c. 90,000
d. 100,000
e. 35,000
ANS: C REF: Section 7.1 TOP: Factual
3. The labor market determines:

a. structural unemployment.
b. the equilibrium quantity of employment.
c. the equilibrium wage and the quantity of employment.
d. the number of unemployed.
e. the minimum wage.
ANS: C REF: Section 7.2 TOP: Applied
4. If the U.S. real output is growing and labor income accounts for about two-thirds of this,
a. the unemployment rate is falling.
b. on average, capital is getting poorer over time.
c. income inequality is decreasing.
d. on average, workers are getting richer over time.
e. we are not getting any better off.
ANS: D REF: Section 7.2 TOP: Applied
5. Over the past 50 years or so,

a. the employment-population ratio always has been rising.
b. the employment-population ratio generally has been falling.
c. the unemployment-population ratio generally has been rising
d. the employment-population ratio generally has been rising.
e. None of the above is correct.
6. Over the past 50 years or so,
a. the male employment-population ratio always has been rising.
b. the female employment-population ratio generally has been falling.
c. the male employment-population ratio generally has been rising.
d. the female employment-population ratio generally has been rising.
7. Consider Table 7.1. In December 2006, the unemployment rate was:

a. about 3.0 percent.
b. about 4.5 percent.
c. about 33.8 percent.
d. about 63.4 percent.
e. about 4.7 percent.
ANS: B REF: Section 7.2 TOP: Applied
8. Consider Table 7.1. In January 2007, the unemployment rate was:

a. about 4.8 percent.
b. about 4.6 percent.
c. about 33.8 percent.
d. about 3.0 percent.
e. about 9.0 percent.
9. Consider Table 7.1. Between December 2006 and January 2007, the unemployment rate
_______________ and the labor participation rate _______________ (rounded to 1 decimal
point).
a. rose; fell
b. rose; rose
c. rose; was about the same
d. fell; fell
e. Not enough information is given.
ANS: C REF: Section 7.2 TOP: Conceptual
10. Generally, during a recession:
a. inflation rises.
b. the natural rate of unemployment rises.
c. the employment rate rises.
d. the unemployment rate rises.
e. there is no change in the unemployment rate.
11. Using Figure 7.1, which depicts the U.S. unemployment rate, which of the following year(s)
are the trough of a recession?
a. 1974
b. 1983
c. 1992
d. all of the above
e. none of the above
ANS: D REF: Section 7.2 TOP: Conceptual
a. 1980
b. 1989
c. 2001
d. all of the above
ANS: E REF: Section 7.2 TOP: Conceptual
a. 2001
b. 1983
c. 1979
d. all of the above
ANS: B REF: Section 7.2 TOP: Conceptual
14. Using Figure 7.1, which depicts the U.S. unemployment rate, identify the year(s) of the peak
of the boom.
a. 1983
b. 1989
c. 2001
d. all of the above
15. Given the unemployment rate data depicted in Figure 7.1, identify the year(s) of the peak of
the boom.
a. 1989
b. 2001
c. 1983
d. all of the above
16. The unemployment rate is defined as:

a. the ratio of all adults not working to the total population.
b. the ratio of unemployed to employed members of the labor force.
c. the ratio of unemployed members of the labor force to the total labor force.
d. the ratio of discouraged workers to the total population.
e. the ratio of unemployed members of the labor force to the total population.
17. During the Great Depression, unemployment reached about __________ at its peak.
a. 8 percent
b. 15 percent
c. 25 percent
d. 40 percent
e. 5 percent
18. The Great Depression:

a. is synonymous with the birth of modern macroeconomics.
b. was a rapid expansion in output.
c. stimulated the creation of Keynesian economics.
d. was largely responsible for the rational expectations revolution.
e. Both a and c are correct.
ANS: E REF: Section 7.2 TOP: Applied
19. The net change in employment is:
a. new jobs.
b. the difference between job creation and job destruction.
c. called job creation.
d. the unemployment rate.
e. the labor force participation rate.
20. Historically, for most Americans, the length of unemployment is:

a. usually more than one year.
b. usually more than three months.
c. usually less than three months.
d. indefinite.
e. less than one week.
21. Most of the total weeks of lost work are accounted for by:
a. retirees.
b. people who are discouraged workers.
c. people who are incarcerated.
d. people who are unemployed for a long period of time.
e. None of the above.
22. When an individual becomes unemployed, the average unemployment benefit:

a. is about $10,000 per year.
b. is about $275 per month.
c. is about $275 per week.
d. equals what the individual earned before becoming unemployed.
e. is about $10 per day.
23. A drawback of unemployment benefits is:

a. it gives workers a disincentive to find work.
b. it costs taxpayers over 50 percent of their income.
c. the payments are too large.
d. it lengthens the time spent unemployed.
e. Both a and d are correct.
24. The demand for labor curve is:

a. ad hoc.
b. derived from the firm’s profit maximization problem.
c. equal to the average product of labor.
d. derived from the marginal product of labor.
e. Both b and d are correct.
25. The labor demand curve slopes downward because:

a. wages are inflexible.
b. wages are higher when demand falls.
c. of the diminishing marginal product of labor.
d. of the income effect.
26. The explanation for the upward sloping supply of labor curve is that:
a. the marginal product of capital is positive.
b. as the wage rises the opportunity cost of leisure rises, so people work more.
c. as the wage rises, people want to work less.
d. the marginal product of labor is diminishing.
27. In the labor market, the intersection of the supply and demand for labor determines:
a. inflation and the real wage.
b. the wage and the population, N.
c. the interest rate and the unemployment rate.
d. the wage and the employment-population ratio, L/N.
e. the wage and the number of discouraged workers.
28. In the labor market depicted in Figure 7.2, an increase in the income tax would result in:
a. a shift in labor supply from to .
b. a shift in labor demand from to .
c. a shift in labor demand from to .
d. a shift in labor supply from to .
ANS: A REF: Section 7.3 TOP: Applied
29. In the labor market depicted in Figure 7.2, an increase in the income tax would result in:
a. a shift in labor supply from to .
b. a shift in labor demand from to .
c. a shift in labor demand from to .
d. no change in either the labor supply or demand curves.
30. In the labor market depicted in Figure 7.2, an increase in oil prices:
a. shifts labor demand from to .
b. shifts labor supply from to .
c. shifts labor demand from to .
d. produces no change in either the labor supply or demand curves.
e. does none of the above.
ANS: C REF: Section 7.3 TOP: Conceptual
31. In the labor market depicted in Figure 7.2, a decrease in labor regulation:
a. shifts labor supply from to .
b. shifts labor demand from to .
d. shifts labor supply from to .
32. In the labor market depicted in Figure 7.2, investment in new physical capital:
a. shifts labor supply from to .
b. shifts labor supply from to .
d. shifts labor demand from to
33. If the income taxes on wages increase, the labor supply curve will shift left, but what
happens to the unemployment rate?
a. It unambiguously falls because the labor participation rate changes.
b. It unambiguously falls because some workers drop out of the workforce.
c. It unambiguously rises because some workers drop out of the workforce.
d. It is ambiguous because some workers drop out of the workforce.
34. An increase in the income taxes on wages results in:

a. the labor demand curve shifting left.
b. the labor supply curve shifting left.
c. the labor supply and demand curves shifting left.
d. the labor demand curve shifting right.
e. neither the labor supply nor demand curves shifting.
35. A decrease in the income tax will result in:

a. the labor demand curve shifting right.
b. the labor demand curve shifting left.
c. the labor supply curve shifting left and the labor demand curve shifting right.
d. the labor supply curve shifting right.
36. An increase in labor regulations results in:

a. the supply curve shifting left.
b. the labor demand curve shifting left.
c. the labor supply curve shifting left and the labor demand curve shifting right.
d. the labor demand curve shifting right.
37. Because of the dynamics of the workforce, for example, whether or not workers become
discouraged when there are changes in the economy,
a. the unemployment rate is not necessarily an accurate gauge of the labor market.
b. the unemployment rate is a precise gauge of the labor market.
c. it might be best to consider the employment population ratio rather than the
unemployment rate.
d. Both a and c are correct
38. An institutional fixed wage set above the equilibrium wage is called:
a. the market wage.
b. the minimum wage.
c. a wage rigidity.
d. a real rigidity.
39. Wage rigidity:

a. helps the labor market achieve equilibrium.
b. prevents the capital market from realizing equilibrium.
c. prevents the labor market from realizing equilibrium.
d. prevents unemployment.
40. If the minimum wage is set below the equilibrium market wage,
a. it increases unemployment.
b. it is effective and reduces unemployment.
c. it equals the black market wage.
d. it is not effective, because it is lower than firms are willing to pay for labor.
e. None of the above are correct.
41. One, or more, consequence(s) of wage rigidity is (are):

a. higher rates of unemployment.
b. greater labor market volatility.
c. labor market stability.
d. a lower unemployment rate.
e. a and b
42. Consider the labor market depicted in Figure 7.3.
Wage w¯ is called __________ and __________ unemployment.
a. wage rigidity; decreases
b. wage rigidity; increases
c. the market wage; does nothing to
d. the market wage; increases
43. Consider the labor market depicted in Figure 7.3. Wage w¯ is called __________ and
__________.
a. wage rigidity; reduces unemployment
b. wage rigidity; decreases labor market volatility
c. a flexible wage; increases labor market volatility
d. wage rigidity; increases labor market volatility
e. the market wage; increases unemployment
44. The rise in the employment-population ratio largely is due to:

a. a shrinking U.S. population.
b. more teenagers entering the labor force.
c. more women entering the labor force.
d. an increase in immigrant workers.
e. It is unexplained.
45. The causes of increased female participation in the labor market are:
a. changing social norms.
b. technological changes in managing fertility.
c. reduced discrimination.
d. all of the above
e. a and c
46. The gradual rise in unemployment in the 1960s and 1970s, in part, is explained by:
a. the Vietnam War.
b. increased female participation in the labor force.
c. the baby boomers.
d. all of the above
47. The “natural rate of unemployment” is the unemployment rate that would prevail:
a. during changes in the business cycle.
b. if the economy were in neither a boom nor a recession.
c. if people voluntarily leave work.
d. during seasonal changes in the economy.
e. if the unemployment rate were zero.
ANS: B REF: Section 7.3 TOP: Factual
48. The natural rate of unemployment is the unemployment rate that would prevail:
a. if inflation is zero.
b. if there are no discouraged workers.
c. if the economy were in neither a boom nor a recession.
d. during seasonal changes in the economy.
e. if the unemployment rate is zero.
49. The natural rate of unemployment is decomposed into:

a. cyclical and frictional unemployment.
b. structural and seasonal unemployment.
c. structural and frictional unemployment.
d. seasonal and frictional unemployment.
e. structural, frictional, and seasonal unemployment.
50. Frictional unemployment is the unemployment that results from:

a. workers losing jobs during recession.
b. workers losing their jobs during seasonal changes.
c. workers changing jobs in a dynamic economy.
d. prevailing labor market institutions.
e. workers leaving the labor force.
51. Structural unemployment is the unemployment that results from:

a. workers leaving the labor force.
b. workers changing jobs in a dynamic economy.
c. workers losing their jobs during seasonal changes.
d. workers losing jobs during recession.
e. prevailing labor market institutions.
ANS: E REF: Section 7.3 TOP: Factual
52. Cyclical unemployment is the unemployment that results from:

a. prevailing labor market institutions.
b. workers losing jobs during recession.
c. workers changing jobs in a dynamic economy.
d. workers losing their jobs during seasonal changes.
e. workers leaving the labor force.
53. Unemployment is given by __________ and the natural rate of unemployment is

__________.
a. Frictional + Structural + Cyclical unemployment; Frictional + Structural
unemployment
b. Frictional + Structural – Cyclical unemployment; Frictional + Structural
unemployment
c. Frictional + Cyclical unemployment; Frictional + Cyclical unemployment
d. Structural + Cyclical unemployment; Structural unemployment
e. Cyclical unemployment; Frictional + Structural unemployment
ANS: A REF: Section 7.3 TOP: Applied
54. Conventional wisdom is that most of the natural rate of unemployment is due to:
a. bad fiscal policy.
b. frictional unemployment.
c. cyclical unemployment.
d. structural unemployment.
e. bad monetary policy.
55. A key reason that unemployment in the United States is so low compared to most of Europe
is because of:
a. no cyclical unemployment.
b. low frictional unemployment.
c. high structural unemployment.
d. low structural unemployment.
e. no structural unemployment.
56. In the 1960s, European unemployment rates were __________ compared to the United
States and now are __________.
a. much higher; much higher
b. much lower; about the same
c. much lower; much higher
d. about the same; much lower
57. __________ historically has had the lowest unemployment rate since 1960.
a. The United States
b. Japan
c. France
d. The United Kingdom
e. Germany
58. Europe’s relatively high unemployment rates can be attributed to:

a. adverse shocks.
b. inefficient labor market institutions.
c. strong labor unions.
d. generous unemployment insurance.
e. all of the above
59. Unemployment benefits in the United States are extended generally about __________,
while in Europe they average __________.
a. six months; one year
b. six months; five years
c. three months; two years
d. six weeks; six months
e. five years; six months
60. Of the richest countries, __________ work the most hours per week.
a. Germans
b. Americans
c. the Japanese
d. Canadians
e. Australians
61. The idea that you value receiving $1,000 today more than in 10 years in the future is called:
a. real rate of return.
b. compound interest.
c. present discounted value.
d. utility maximization.
e. intertemporal substitution.
62. The equation means you:
a. would prefer to receive $386 today than $1,000 in 10 years.

b. are indifferent between receiving $386 today and $1,000 in 10 years.
c. would prefer to receive $1,000 in 10 years than $386 today.
d. are indifferent between receiving $386 today and $1,000 in 100 years.
e. do not have enough information.
63. You win the lottery, which pays $1 million in 20 annual $50,000 payments. Your friends
ask how much that would be if you received a single lump sum payment today. You do not
have your calculator, but you show them the following equation to help them solve it
themselves, assuming the interest rate is 10 percent:
a.
b.
c.
d.
e. Either a or b is correct.
64. Consider the simplified payment system for the victims of 9/11:
• The family of a 65-year-old service worker earning $10,000 a year receives $300,000 in
compensation.
• The family of a 30-year-old bond trader earning $175,000 a year receives $4.35 million.
Which statement best describes the difference in the payments between the service worker
and the bond trader?
a. The present value of the bond trader’s lifetime income is greater than the service
worker’s.
b. Because of her age, the bond trader had less savings to rely on so her family
received more compensation.
c. The future value of the bond trader’s lifetime income is less than the service
worker’s.
d. Such a discrepancy in compensation would never be the case.
ANS: A REF: Section 7.6 TOP: Conceptual
65. By 2002, the college wage premium was about __________ than the wage of the typical
worker with a high school education.
a. 50 percent more
b. 10 percent more
c. 100 percent more
d. 90 percent more
66. Beginning in __________, the wage premium began __________.

a. 1980; slowing down
b. 1980; accelerating
c. 1963; trending down
d. 1970; accelerating
e. 1970; rising
67. The percentage of total hours worked by the supply of college-educated workers compared
to the percentage of total hours worked by high-school educated workers has been:
a. constant.
b. climbing steadily to about 20 percent.
c. falling steadily to about 50 percent.
d. climbing steadily to about 50 percent.
e. doing none of the above.
68. Consider Figure 7.4. Given what we know about the number of hours worked by college
graduates and the wage premium received by college graduates, which equilibrium in the
figure characterizes these empirical observations, on average?
a. the intersection of and
b. the intersection of and
c. the intersection of and
d. the intersection of and
69. Consider Figure 7.4. Given what we know about the difference between college- and high
school-educated workers, which equilibrium characterizes the high school graduate
experience, on average?
a. the intersection of and
b. the intersection of and
c. the intersection of and
d. the intersection of and
70. Consider Figure 7.4. If the demand curve for college graduates is characterized by ,
which of the following describes why the demand for labor for college graduates is higher
than that for high school students, characterized by ?
a. There is a growing number of college graduates.
b. There are fewer college graduates than high school graduates.
c. College graduates have a higher marginal product.
d. College graduates are smarter than high school graduates.
71. Consider Figure 7.4. If the demand curve for college graduates is characterized by ,
which of the following is a reason why the demand for labor for college graduates is higher
than that for high school students, characterized by L1D?
a. skill-based technological change
b. globalization, which leads to college graduate scarcity
c. There are fewer college graduates than high school graduates.
d. There is a growing number of college graduates.
e. a and b are correct.
TRUE/FALSE
1. Unemployment due to institutional frictions is called structural unemployment.
ANS: T REF: Section 7.3 TOP: Factual
2. Since the end of World War II, the percentage of women in the workforce has been falling.
ANS: F
FEEDBACK: It has been rising; indeed, a higher percentage of workers are women than
men.
REF: Section 7.2 TOP: Factual
3. If the number of employed is 145,926, the number of unemployed is 6,849, and the number
of discouraged workers is 77,676, the unemployment rate is about 4.5 percent.
ANS: T REF: Section 7.2 TOP: Applied
4. 5% = 6,849/(6,849 + 145,926)
REF: Section 7.2
TOP: Applied
4. If the civilian noninstitutionalized population is 230,108, the number of employed is
145,926, the number of unemployed is 6,849, and the number of discouraged workers is
77,676, the unemployment rate is about 3.0 percent.
ANS: F
FEEDBACK: This is the ratio of the unemployed workers to the civilian
noninstitutionalized population.
REF: Section 7.2 TOP: Applied
5. Unemployment generally falls during economic booms.
6. Unemployment due to workers shuffling from one job to the next is called cyclical
unemployment.
ANS: F
FEEDBACK: It is called frictional unemployment.
7. The average unemployment benefit of an American worker is about $275 per week and lasts
about six months.
8. Large unemployment benefits give workers an incentive to find work.
ANS: F
FEEDBACK: They give a disincentive for work; witness continental Europe; generous
benefits create moral hazard.
9. For most Americans, the length of unemployment is usually less than three months.
10. The labor demand curve is derived from the marginal product of labor.
11. When a firm purchases more capital, ceteris paribus, the demand for labor will fall.
ANS: F
FEEDBACK: It will rise because of increased marginal product.

12. An increase in the income tax causes the labor demand curve to shift inward.
ANS: F
FEEDBACK: It causes the labor supply to shift inward because it gives workers a
disincentive to work.
13. The supply of labor curve slopes upward because, with a higher wage, the opportunity cost
of leisure rises.
14. Wage rigidity decreases labor market volatility.
ANS: F
FEEDBACK: Volatility rises because it causes larger swings in the equilibrium number of
workers hired.
15. If the minimum wage is set below the equilibrium wage, it will have no effect on
unemployment.
ANS: T
FEEDBACK: If , it is nonbinding.
16. Of the richest countries, the Japanese spend more hours working than any other country’s
workers.
17. The idea that you value receiving $1,000 today more than 10 years in the future is called
compound interest.
ANS: F
FEEDBACK: It is called present discounted value.
18. The equation
means that you would prefer receiving $621 today rather than $1,000 in five years.
ANS: F
FEEDBACK: It implies you are indifferent between the two payments.
19. In 2002, the wage premium for a college-educated worker was about 50 percent above that
of a high school-educated worker.
ANS: F
FEEDBACK: It was about 90 percent.
20. One explanation for the college wage premium is that demand for skill-based knowledge is
rising.
21. The unemployment rate in Europe has always been higher than the rate in the United States.
ANS: F
FEEDBACK: It was lower than in the United States until about 1972.
22. The natural rate of unemployment is equal to frictional plus cyclical unemployment.
ANS: F
FEEDBACK: It is equal to frictional plus structural unemployment.
23. The natural rate of unemployment is equal to frictional plus structural unemployment.
SHORT ANSWER
1. Consider the following data from August, 2010:
(a) Calculate the labor participation rate.

(b) Calculate the unemployment rate.
(c) What is the number of discouraged workers?
(d) Consider Figure 7.5 below. What might explain the decline in the labor participation rate
from 2001 to 2010?
ANS:
(a) u = UNEM/LF = 9.67%

(b) LPR = LF/CPOP = 154.1/238.1 = 64.7%
(c) Not enough information.
(d) High persistent unemployment. Indeed, the number of the chronically unemployed is
higher than the number of short-run unemployed for the first time, as discussed in Section
7.2.1. This is also due to the growth of “discouraged workers.”
REF: Section 7.2 TOP: Conceptual

2. Leading up to the 2010 mid-term elections, there was lively debate on whether or not the
Bush tax cuts, enacted in 2003, should be allowed to expire for families with annual
incomes over $250 thousand. What would be the impact of allowing income taxes on these
families to rise on their income and the number of labor participants?
ANS:
Using the labor market we would see a decline in the supply of labor, which would increase
wages/salaries for those workers still in the market as the number of workers declined (see
Figure 7.4).
3. Historically, young French workers (under age 26) have had relatively high unemployment
rates, 23.5 percent in 2005. In 2006 the French government proposed to allow employers to
fire young employees without cause (a labor restriction). How should this policy improve
employment prospects for young French workers? What would the impact on their wages
be?
ANS:
Labor demand is a function of the marginal product of labor, changes in output prices, and
labor regulation. A heavily regulated labor market reduces the demand for labor. Removing
these restrictions would increase the demand for young labor and commensurately increase
their wages.
REF: Section 7.3| Section 7.4 TOP: Applied

4. Consider Figure 7.6, which shows the unemployment rate from 1948–2010.
(a) What does the smooth line represent? How can it be represented?
(b) Based solely on this data, was the period from approximately 1963–1971 an expansion
or recession? Explain. What about the period 1981–1986?
(c) Based on the data presented, what is your prediction for future rates of unemployment?
ANS:
(a) It is the natural rate of unemployment, which is the prevailing rate of unemployment
when the economy is neither expanding nor in recession. It can be approximated by adding
frictional and structural rates of
unemployment.
(b) Because the unemployment rate is below the natural rate, the economy is expanding.
Vice versa for the period 1981–86.
(c) The natural rate of unemployment is trending up, based on this information (the most
recent); unemployment rates are likely to remain relatively high for some time, though this
answer is somewhat subjective.
5. You are a senior graduating soon. In 2010 the average annual wage was about $62,000.
Suppose you graduate when you are 22 and will retire when you are 67 (normal in the
United States, about 45 years of work). Assuming your wages don't grow over time,
ignoring inflation, and assuming we discount the future at 4.5 percent, what would be
present value of your human capital? If we discount the future at 3 percent what would be
your present value lifetime income? Intuitively explain the difference.
ANS:
We use the equation in Section 7.5, for R = 0.045:
million
R = 0.03:
million
As you lower the discount rate, the more the future is worth to you today, so the present
value would be higher.
6. What has been happening to cause returns to a college education over the past 50 years or
so, compared to only receiving a high school education? What explains this difference?
ANS:
See Figure 7.11 in text. College wages have been rising relative to high school wages. Using
the labor market equilibrium this is due to higher demand and lower supply of college
graduates, as seen in Figure 7.9.

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de Nauarra con gran poder, por
tener ausente a nuestro prinçipe,
Rey y Señor, se juntaron todos los
grandes y señores de Castilla;
guiando por gouernador y capitan
general el condestable Don Yñigo
de Velasco para yr en la defensa
y amparo y restituçion de aquel
Reyno, porque se auian ya
lançado los françesses hasta
Logroño; y ansi por ser ya mi
padre viejo y indispuesto me
cometio y dió el poder de su
capitania con çedula y liçençia del
Rey; y ansi quando por los
señores gouernadores fue
mandado mouer, mandé a mi sota
capitan y alferez que caminassen
con su estandarte, siendo todos
muy bien proueydos y basteçidos
por nuestra reseña y alarde;
porque yo tenia çierto negoçio en
Logroño en que me conuenia
detener le mandé que guiassen, y
por mi carta se pressentassen al
Señor Capitan General, y yo
quedé allí; y despues quando
tuue acabado el negoçio parti con
vn escudero mio que á la contina
le lleuaba para mi conpañia y
serviçio en vn roçin; y luego como
entramos en[416] Nauarra fue
auisado que las mugeres en
aquella tierra eran grandes
hechizeras encantadoras, y que
tenian pacto y comunicaçion con
el demonio para el effecto de su
arte y encantamiento, y ansi me
auisauan que me guardasse y
viuiesse recatado, porque eran
poderosas en peruertir los
honbres y avn en conuertirlos en
vestias y piedras si querian; y
avnque en la verdad en alguna
manera me escandalizasse,
holgué en ser auisado, porque la
neçedad como es regoçijada
reçibe pasatiempo con
semejantes cosas; y tanbien
porque yo de mi cogeta fue
affiçionado a semejantes
aconteçimientos. Por tanto yua
deseoso de encontrarme con
alguna que me encantasse, y avn
yua de voluntad y pensamiento de
trocar por alguna parte de aquella
arte el fauor del prinçipe y su
capitania; y caminando vna
mañana[417] yendo reboluiendo
estas cosas en mi pensamiento,
al bajar de vna montaña me apeé
por estender las piernas, y
tanbien porque descansasse algo
mi cauallo, que començaua ya
algo el sol a calentar; y ansi como
fue apeado tirandole de las orejas
y estregandole el rostro di la
rienda a mi escudero Palomades
que ansi se llamaua,
mandandole[418] que caminasse
ante mi; y en esto bolui la cabeça
atras y veo venir tras mi vn
honbre en vna vestia, el qual en
su habito y trato luego que llegó
me pareçió ser de la tierra; por lo
qual y por holgar yo mucho de la
conuersaçion le aguardé, y ansi
llegando a mi me saludó; y por el
semejante se apeó para bajar, y
luego començé a le preguntar por
su tierra y lugar, como en el
camino suele aconteçer y él me
dixo que era de una aldea
pequeña que estaua vna legua de
allí; y yo trabajaua meterle en
conuersaçion presumiendo dél
algun encogimiento, porque como
aquella tierra estuuiesse al
presente en guerras tratan con
nosotros con algun recato no se
nos osando confiar. Pero en la
verdad aquel honbre no mostró
mucha cobardia, mas antes
demasiada liberalidad. Tanto que
de sus hablas y razones
façilmente juzgaras ser otra cosa
que honbre, porque ansi con su
habla me embelleñó que casi no
supe de mi, y ansi del Rey y de la
Reyna, y de la guerra de los
françeses y castellanos venimos a
hablar de la costumbre y bondad
de la gente de la tierra, y el
çiertamente vino a hablar en ello
de buena voluntad. Començomela
a loar de fertil y viçiosa,
abundante de todo lo necesario, y
yo dixe: hombre honrrado yo
tengo entendido desta tierra todo
el cunplimiento entre todas las
prouinçias del mundo, y que la
gente es de buena habilidad y
injenio, y las mugeres veo tanbien
que son hermosas y de apuesta y
agraçiada representacion; y ansi
él me replicó: por cierto, Señor,
ansi es como sentis: y entre todas
las otras cosas quiero que sepais
que las mugeres, demas de su
hermosura, son de admirable
habilidad, en tanta manera que en
saber exçeden a quantas en el
mundo son. Entonçes yo le
repliqué deseando saber de su
sçiençia; importunandole me
dixesse algo en particular de su
saber; y él me respondió en tanta
abundançia que toda mi atençion
lleuaua puesta en lo que el dezia.
Diziendo: señor, mandan el sol y
obedeçe, a las estrellas fuerçan
en su curso, y a la luna quitan y
ponen su luz conforme a su
voluntad. Añublan los ayres, y
hazen si quieren que se huelle y
paseen como la tierra. Al fuego
hazen que enfrie, y al agua que
queme. Hazense moças y en vn
punto viejas, palo, piedra y vestia.
Si les contenta vn honbre en su
mano está gozar dellos[419] a su
voluntad; y para tenerlos mas
aparejados a este effecto los
conuierten en diuersos animales
entorpeçiendoles sus[420]
sentidos y su buena naturaleza.
Han podido tanto con su arte que
ellas mandan y los honbres
obedeçen, o les cuesta la vida.
Porque quieren vsar de mucha
libertad yendo de dia y de noche
por caminos, valles y sierras a
hazer sus encantos y a coxer sus
yeruas y piedras, y hazer sus
tratos y conçiertos. Lleuauame
con esto tan traspuesto en si que
ningun acuerdo tenia de mi
quando llegamos al lugar; y
cabalgando en nuestras vestias
nos metimos[421] por el pueblo, y
queriendo yo passar adelante me
forçó con grande importunidad y
buena criança que quisiesse
apearme en su posada porque
seruia a vna dueña valerosa que
acostunbra reçebir semejantes
caualleros en su casa de buena
voluntad; y como fuesse llegada
la hora del comer holgué de me
apear. Salionos a reçebir vna
dueña de alta y buena
dispusiçion, y[422] avnque
representaua alguna edad tenia
ayre y desenboltura de moça, y
en viendome se vino para mi con
vna boz y habla halagüeña y muy
de presto dispuso toda la casa y
aparato con tanto seruiçio como si
fuera casa de un principe o
poderoso señor; y quando miré
por mi guia no la vi; porque
entrando en casa se me
desapareçió; y segun pareçe por
todo lo que passó antes y
despues no puedo creer sino que
aquella muger tenia aquel
demonio por familiar en hábito y
figura de honbre. Porque segun
mostró en su habla, trato y
conuersaçion no creo otra cosa,
sino que le tenia para enbiarle a
caza de hombres quando para su
apetito y recreaçion le daua la
voluntad. Porque ansi me cazó a
mi como agora oyras. Luego
como llegamos, con mil regalos y
ofreçimientos dispuso la comida
con grande aparato, con toda la
diligençia y soliçitud posible; en
toda abundançia de frutas, flores
y manjares de mucho gusto y
sabor, y los vinos muy preçiados
en toda suauidad, seruidos de
diuersas dueñas y donzellas, que
casi pareçian diferentes con cada
manjar. Tubome la fiesta en
mucho regocijo y passatiempo en
vna sala baja que caya sobre un
huerto de frutas y de flores muy
suabes; ya me pareçia que por
poco me quedara alli, sino fuera
porque ansi como en sueño me
acordé de mi viaje y compañia, y
aconsideré que corria gran peligro
mi honrra si me descuydasse; y
ansi sospirando me leuanté en pie
proponiendo yr con la posible
furia a cunplir con la guerra y
luego boluerme a gozar de aquel
parayso terrenal. Y ansi la maga
por estar muy contenta de mi
buena dispusiçion me propuso a
quedarme aquella noche alli;
diziendo que ella no queria, ni
tenia quanta prosperidad y
aparato poseya sino para seruir y
hospedar semejantes caualleros.
Prinçipalmente por auer sido su
marido vn castellano de gran
valor, al qual amó sobre todas las
cosas desta vida, y ansi no podia
faltar a los caualleros castellanos,
por representarsele qualquiera
dellos aquellos sus primeros
amores que ella a la contina tenia
ante sus ojos presente. Pero
como avn yo no auia perdido del
todo mi juizio y vso de razon
trabajé de agradeçerle con
palabras acompañadas de mucho
cumplimiento y criança la merçed
que me hazia; con protestaçion
que acabada la guerra yo vernia
con mas libertad a la seruir. No le
pessó mucho a la maga mi
defensa como esperaua antes de
la mañana satisfazerse de mi
mucho a su voluntad; y ansi me
dixo: pues señor, presupuesto
que teneis conoçido el deseo que
tengo de os seruir, y confiando
que cumplireis la palabra que me
dais, podreis hazer lo que
querreis; y por mas os seruir os
daré un criado mio que os guie
quatro leguas de aqui, donde os
vays a dormir con mucho solaz.
Porque tengo alli una muy
valerosa sobrina que tiene vn
fuerte y muy hermoso castillo en
vna muy deleytosa floresta que
estará quatro leguas de aqui,
llegando esta noche allí, no
perdiendo xornada para vuestro
proposito, por ser mia la guia y
por la graçia de mi sobrina que
tiene por costunbre[423] hospedar
semejantes caualleros, como yo,
os hospedará, y allí pasareis esta
noche mucho a vuestro contento
y solaz; yo le bessé las manos
por tan gran merçed, la qual
açepté; y luego salió el viejo que
me truxo allí cabalgando en vn
rozin y despidiendome de la
maga[424] començamos a
caminar. Fuemos hablando en
muchos loores de su señora, que
nunca acabaua de la
engrandeçer. Pues dixome: Señor
agora vays a este castillo donde
vereis vna donzella que en
hermosura y valor exçede a
quantas en el mundo ay; y
demandandole por su nonbre,
padres y calidad de estado me
dixo él: eso haré yo, señor, de
muy buena voluntad de os dezir,
porque despues desta mi señora
a quien yo agora siruo no creo
que ay en el mundo su igual, y a
quien con mejor voluntad
deseasse ni deua yo seruir por su
gran valor; y ansi Señor,
sabed[425] que esta donzella fue
hija de vn señor natural desta
tierra, del mejor linaje que en ella
ay, el qual se llamaua el gran
varon; y por su hermosura y linaje
fue demandada de muchos
caualleros de alta guisa, ansi
desta tierra como de Francia y
Castilla, y a todos los
menospreçió proponiendo de no
casar con otro sino con el hijo de
su rey; y siendo tratadas entre
ellos palabras de matrimonio
respondió el Rey de Nauarra que
tenia desposado su hijo con la
segunda hija del Rey de Françia,
y que no podia faltarle la palabra.
Por lo qual sintiendo ella afrenta
no auerle salido çierto su deseo,
por ser dama de alta guisa
propuso de nunca se casar hasta
oy; y ansi por auer en su linaxe
dueñas muy hadadas que la
hadaron, es ella la mas hadada y
sabia muger que en el mundo ay.
En tanta manera que por ser tan
sabia en las artes la llaman en
esta tierra la donzella Saxe hija
del gran varon; y ansi hablando
en esto fuemos a entrar en vna
muy hermosa y agraçiada floresta
de mucha y deleytable arboleda.
Por la qual hablando en estas[426]
y otras muchas cosas caminamos
al pareçer dos leguas hasta que
casi se acabó el dia. Y ansi casi
media hora antes que se pusiesse
el sol llegamos a vn pequeño y
muy apazible valle donde pareçia
que se augmentaua mas la
floresta con muchos jazmines
altos y muy graçiosos naranjos
que comunicauan en aquel
tiempo su oloroso azahar, y otras
flores de suabe y apazible olor.
En el medio del qual valle se
mostró vn fuerte y graçioso[427]
castillo que mostraua ser el
parayso terrenal. Era edificado de
muy altas y agraçiadas torres de
muy labrada canteria. Era labrado
de muy relumbrante marmol y de
jaspes muy finos, y del alabastro
y del musayco y moçaraues muy
perfetos y otras piedras de mucha
estima[428]. Pareciome ser dentro
de exçeso sin conparaçion más
polido, pues de fuera auia en el
tanta exçelençia. Y ansi fue que
como llamamos a la puerta del
castillo y por el portero fue
conoçida mi guia fueron abiertas
las puertas con mucha liberalidad,
y entramos a vn ancho patio; del
qual cada cuadro tenia seys
colunas de forma jonica, de fino
marmol, con sus arcos de la
mesma piedra, con vnas medallas
entre arco y arco que no les
faltaua sino el alma para hablar.
Eran las imagines de Piramo y
Tisbe, de Philis y Demophon; de
Cleopatra y Marco Antonio. Y ansi
todas las demas de los
enamorados de la antiguedad; y
antes que passe adelante quiero
que entiendas que esta donzella
Saxe de que aqui te contaré, no
era otra sino la vieja maga que en
el aldea al comer me hospedó. La
qual como le pareçiesse que no
se aprouechara de mi en su casa
tan a su plazer como aqui, tenia
por sus artes y industrias del
demonio esta floresta y castillo y
todo el seruiçio y aparato que
oyras, para holgar con quien
queria noches y dias como te
contaré. Por el friso de los arcos
del patio yua vna gruesa cadena
dorada que salia releuada en la
canteria, y vna letra que dezia:
«Quantos van en derredor,

son prisioneros de amor».
Auia por todo el torno ricas

imagines y piedras del Oriente, y
auia en los corredores altos
gruesas colunas enteras de
diamante, no sé si verdadero o
falso, pero oso juzgar que no auia
mas bella cosa en el mundo. Por
lo alto de la casa auia terrados de
muy hermosos y agraçiados
edefiçios, por los quales andauan
lindas y hermosas damas
vestidas de verde y de otros
amorosos colores, con guirnaldas
en las cabezas, de rosas y flores,
dançando a la muy suaue musica
de arpas y dulçaynas que les
tañian sin pareçer quién. Bien
puede qualquiera que aqui entre
afirmar que fuesse aqui el
parayso o el lugar donde el amor
fue naçido: porque aqui ni entra,
ni admiten en esta compañia cosa
que pueda entristeçer, ni dar
passion. No se vsa[429] aqui
otra[430] cosa sino[431] juegos,
plazeres, comeres, danzar, vaylar
y motexar. Y otras vezes juntas
damas y caualleros cantar musica
muy ordenada, que juzgaras estar
aqui los angeles en contina
conuersaçion y festiuidad. Nunca
alli entró cana, arruga, ni vejez;
sino solamente juuentud de doze
hasta treynta años, que se sepa
comunicar en todo deleyte y
plazer. En esta casa siempre es
abril y mayo, porque nunca en
todo el año el suaue y templado
calor y fresco les falta; porque
aquella diosa lo dispone con su
arte a medida de su voluntad y
neçesidad. Acompañanla aqui a
la contina muy valerosas damas
que ella tiene en su compañia de
su linaxe, y otras por amistad, las
quales atraen allí caualleros que
vienen en seguida de su valor.
Estos hazen la corte mas vfana y
granosa que nunca en casa de
Rey ni emperador tan adornada
de cortesania se vio. Porque
solamente entienden[432] en
inuençiones de traxes, justas,
danças y vayles; y otras a la
sonbra de muy apazibles arboles
nouelan, motejan, rien con gran
solaz; qual demanda questiones y
preguntas de amores; hazer
sonetos, coplas, villançicos, y
otras agudeças en que a la
contina reçiben plazer. Por lo alto
y por los xardines, por çima de
chopos, fresnos, laureles y
arrayanes, buelan calandrias,
sirgueros, canarios y ruyseñores
que con su musica hazen suaue
melodia. Estando yo mirando toda
esta hermosura ya medio fuera de
mi, se me pusieron delante dos
damas más de diuina que de
humana representaçion porque
tales pareçian en su habito, modo
y gesto; que todas venian
vestidas como de casa real.
Trayan muy ricos requamados,
joyas y piedras muy finas; rubies,
esmeraldas, diamantes, balajes,
zafires, jaçintos y de otras infinito
numero que no cuento. Estas
puestas ante mi con humilde y
agraçiado semblante, auiendoles
yo hecho la cortesia que a tales
damas se les deuia, con muy
cortés razonamiento me
ofreçieron el hospedaje y seruiçio
de aquella noche de parte de la
señora del castillo; y yo auiendo
açeptado la merçed con
hazimiento de graçias, me dixeron
estar me aguardando arriba; y
ansi dexando el cauallo a mi
escudero me guiaron por el
escalera. Avn no auiamos
acabado de subir quando vimos a
la bella Saxe que venia por el
corredor, la qual con aquella
cortesia y semblante me reçibió
como si yo fuera el Señor de todo
el mundo, y ansi fue de toda
aquella y trihunfante y agraçiada
corte tan reuerençiado y acatado
como si yo fuera todo el poder
que los auia de mandar. Era aquel
palaçio tan adornado y exçelente,
y tan apuesta aquella
bienauenturada[433] compañia
que me pareçe que mi lengua la
haze injuria en querertelo todo
pintar. Porque era ello todo de
tanto aparato y perfecçion, y mi
injenio de tan poca eloquençia
que es neçesario que baje su
hermosura y grandeza muy sin
comparaçion. Muchos abria a
quien yo contasse esta historia
que por su poca esperiençia les
pareçiese[434] manera de fingir.
Pero esfuerçome a te la pintar a ti
Miçilo más en la verdad que
puedo porque tengo entendido de
tu cordura que con tu buen crédito
debajo destas toscas y cortas
palabras entenderas lo mucho
que quiero sinificar. Porque
ciertamente era aquella corte y
compañia la más rica, la más
hermosa, agraçiada y generosa
que en el mundo nunca fue: ni
lengua humana con muy alta y
adornada eloquençia nunca
podria encareçer, ni pluma
escreuir. Era toda de florida y
bella edad, y sola entre todas
venia aquella mi bella diosa
relumbrando como el sol entre
todas las estrellas, de belleza
estraña. Era su persona de
miembros tan formados quanto
pudiera con la agudeza de su
ingenio pintar aquel famoso
Apeles con su pinçel. Los
cabellos luengos, rubios y
encrespados; trançados con vn
cordon de oro que venia a hazer
una injeniosa laçada sobre el lado
derecho de donde colgaua vn
joyel que no auia juizio que le
bastasse estimar[435]. Traya los
carrillos muy colorados de rosas y
jazmines, y la frente pareçia ser
de vn liso marfil; ancha,
espaciosa, llana y conueniente,
que el sol hazia eclipsar con su
resplandor. Debajo de dos arcos
de çejas negras como el fino
azabache le estan baylando dos
soles piadosos a alunbrar a los
que los miran, que pareçia estar
amor jugando en ellos y de alli
disparar tiros gentiles con que
visiblemente va matando a
qualquier hombre que con ellos
echa de ver. La nariz pequeña y
afilada, en que naturaleza mostró
su perfeçion. Muestrasse debajo
de dos pequeños valles la chica
boca de coral muy fino, y dentro
della al abrir y çerrar de un labrio
angelical se muestran dos hylos
de perlas orientales que trae por
dientes. Aqui se forman
çelestiales palabras que bastan
ablandar coraçones de diamante.
Aqui se forma vn reyr tan suaue
que a todos fuerça a obedeçer.
Tenia el cuello redondo, luengo y
sacado, y el pecho ancho, lleno y
blanco como la nieue, y a cada
lado puesta en él vna mançana
qual siendo ella diosa pudiera
poner en si para mostrar su
hermosura y perfeçion. Todo lo
demas que secreto está, como
cuerdo puedes juzgar
corresponder a lo que se muestra
de fuera en la mesma proporçion.
En fin en edad de catorçe años
escogió la hermosura que
naturaleza en vna dama pudo dar.
Pues visto lo mucho que te he
dicho de su veldad no te
marauillarás, Miçilo, si te digo que
de enamorado de su belleza me
perdi; y encantado salí de mí,
porque depositada en su mano mi
libertad me rendí a lo que de mí
quisiesse hazer.
Miçilo.—Por cierto no me
marauillo, Gallo, si perdiesses el
juizio por tan estremada
hermosura, pues a mi me tiene
encantado en solo te lo oyr.
Gallo.—Pues andando ansi,
como al lado me tomó,
siguiendonos toda aquella
graçiosa compañia, me yua
ofreçiendo con palabras de toda
cortesania á su subjeçion:
proponiendo nunca querer ni
demandar libertad, teniendo por
aueriguado que todo el mereçer
del mundo no podia llegar a
poseer joya de tan alto valor; y
avn juzgaua por bienanenturado
al que residiendo en su presençia
se le diesse sola su graçia sin
mas pedir. Hablando en muy
graçiosos requiebros,
faboreçiendome con vnos
ofreçimientos muy comedidos:
vnas vezes por mi persona, otras
diziendo que por quien me
embiaua alli. Entramos a vna gran
sala adornada de muy sumptuosa
y estraña tapiçeria: donde al cabo
della estaua vn gran estrado, y en
el medio dél vn poco más alto,
que mostraua alguna differencia
que se daua algo a sentir, estaua
debajo de un rico dosel de
brocado hecho el asiento de la
bella Saxe con muchos coxines,
debajo del qual junto consigo me
metio; y luego fue lleno todo el
estrado de graçiosas damas y
caualleros, y començando mucha
musica de menestriles se
començo vn diuino serao. Y
despues que todos aquellos
galanes huuieron dançado con
sus damas muy a su contento y
yo con la mia dançé, entraron en
la sala muchos pajes con muy
galanes libreas, con hachas en
sus manos, que los guiaua vn
maestresala que nos llamó a la
çena; y leuantandose todos
aquellos caualleros, tomando
cada qual por la mano a su dama
fuemos guiados por vna escalera
que deçendia sobre vn vergel,
donde estaua hecho vn paseo
debajo de vnos corredores altos
que cayan sobre la gran huerta; el
qual paseo era de largo de
doçientos pies. Eran todas las
colunas de verdadero jaspe
puestas por muy gentil y
agraçiado órden; todas çerradas
de arriba abajo con muy
entretexidos gazmines[436] y
rosales que dauan en aquella
pieza muy suave olor, con lo[437]
que lançauan de si muchos
clabeles y albahacas y naranjos
que estauan çerca de alli. Estaua
vna mesa puesta en el medio de
aquella pieza que era de largo
çien pies, puestos los manteles,
sillas y aparato, y ansi como
deçendimos a lo bajo començó a
sonar grandissimo numero y
differençia de musica: de
trompetas, cheremias,
sacabuches, dulçaynas, flautas,
cornetas y otras muchas
differençias de sonajas muy
graçiosas y apazibles que
adornauan mucho la fiesta y
engrandeçian la magestad y
enchian los coraçones de mucha
alegria y plazer. Ansi se sentaron
todos aquellos caualleros y
damas en la mesa, vna dama con
vn cauallero por su órden; y luego

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Macroeconomics 2nd Edition Jones

3. The labor market determines:

5. Over the past 50 years or so,

7. Consider Table 7.1. In December 2006, the unemployment rate was:

8. Consider Table 7.1. In January 2007, the unemployment rate was:

16. The unemployment rate is defined as:

18. The Great Depression:

20. Historically, for most Americans, the length of unemployment is:

22. When an individual becomes unemployed, the average unemployment benefit:

23. A drawback of unemployment benefits is:

24. The demand for labor curve is:

25. The labor demand curve slopes downward because:

34. An increase in the income taxes on wages results in:

35. A decrease in the income tax will result in:

36. An increase in labor regulations results in:

39. Wage rigidity:

41. One, or more, consequence(s) of wage rigidity is (are):

44. The rise in the employment-population ratio largely is due to:

49. The natural rate of unemployment is decomposed into:

50. Frictional unemployment is the unemployment that results from:

51. Structural unemployment is the unemployment that results from:

52. Cyclical unemployment is the unemployment that results from:

53. Unemployment is given by __________ and the natural rate of unemployment is

58. Europe’s relatively high unemployment rates can be attributed to:

62. The equation means you:

a. would prefer to receive $386 today than $1,000 in 10 years.

66. Beginning in __________, the wage premium began __________.

1. Unemployment due to institutional frictions is called structural unemployment.

ANS: T REF: Section 7.3 TOP: Factual

REF: Section 7.2 TOP: Factual

ANS: T REF: Section 7.2 TOP: Applied

REF: Section 7.2 TOP: Applied

5. Unemployment generally falls during economic booms.

ANS: T REF: Section 7.2 TOP: Factual

REF: Section 7.2 TOP: Factual

ANS: T REF: Section 7.2 TOP: Factual

8. Large unemployment benefits give workers an incentive to find work.

REF: Section 7.4 TOP: Applied

ANS: T REF: Section 7.2 TOP: Factual

ANS: T REF: Section 7.3 TOP: Factual

REF: Section 7.3 TOP: Applied

REF: Section 7.3 TOP: Applied

ANS: T REF: Section 7.3 TOP: Applied

14. Wage rigidity decreases labor market volatility.

REF: Section 7.3 TOP: Applied

REF: Section 7.3 TOP: Applied

ANS: T REF: Section 7.4 TOP: Factual

REF: Section 7.6 TOP: Factual

18. The equation

REF: Section 7.6 TOP: Applied

REF: Section 7.7 TOP: Factual

ANS: T REF: Section 7.7 TOP: Applied

REF: Section 7.4 TOP: Factual

REF: Section 7.3 TOP: Factual

ANS: T REF: Section 7.3 TOP: Factual

(a) Calculate the labor participation rate.

(a) u = UNEM/LF = 9.67%

REF: Section 7.2 TOP: Conceptual

REF: Section 7.3 TOP: Applied

REF: Section 7.3| Section 7.4 TOP: Applied

REF: Section 7.3 TOP: Applied

REF: Section 7.5 TOP: Applied

66. Beginning in , the wage premium began .