Question

QUESTION 17

1. Suppose an employment contract includes a no-quit clause. How does the answer to the question “Who pays for general training?” depend on the no-quit clause?

   		Workers pay for their general training with or without the no-quit clause
   		With the no-quit clause, the firm can pay for general training
   		With the no-quit clause, the worker must pay for general training
   		With the no-quit clause, the firm must pay for general training

2 points   

QUESTION 18

1. The method of financing unemployment insurance benefits tends to

   		increase the length of job search.
   		increase frictional unemployment.
   		create an incentive for firms to prefer layoffs to wage cuts.
   		both a and b.

2 points   

QUESTION 19

1. Unemployed people don't work, but having idle workers

   		facilitates matching workers's skills to the tasks to be performed on jobs
   		encourages worker exploitation
   		is a sure sign of demand deficiency
   		is a symptom of technology replacing workers

2 points   

QUESTION 20

1. Holding all else constant, which of the following labor market flows would increase the unemployment rate if it increased?

   		Pen
   		Pun
   		Pue
   		All of these are correct

Answer 1

Answer 17 - correct option is B

Reason - with no quit clause a firm can safely pay to the employer fir general training because after the training he cannot quit the job hence it will not be a loss for the firm

Answer 18 - option C is correct

Reason - the firm has to pay only the administrative cost due to which creates incentive for the firm layoff to wage cuts as they pay oy half their previous wages on an average

Answer 19 - option D

Reason - idle workers a sure sign or workers are replaced by the technology due to which they are sitting idle

Answer ,20 - option A is correct

Reason - Pen if increased if will increase the unemployment rate