#1
Which of the following is NOT considered a type of unemployment?
Inflationary unemployment
ExplanationInflationary unemployment is not a recognized type of unemployment; it results from rising prices, not labor market dynamics.
#2
What is the main characteristic of frictional unemployment?
It occurs due to a mismatch between the skills of workers and the requirements of available jobs.
ExplanationFrictional unemployment arises from temporary transitions between jobs due to skill mismatches or job search.
#3
What is the term used to describe individuals who are willing and able to work but are not actively seeking employment?
Discouraged workers
ExplanationDiscouraged workers have given up actively seeking employment due to a lack of success, though they remain willing and able to work.
#4
Which of the following is a characteristic of seasonal unemployment?
It occurs due to changes in weather or demand for specific goods or services at certain times of the year.
ExplanationSeasonal unemployment results from predictable, recurring factors such as weather or seasonal demand fluctuations.
#5
Which of the following is an example of voluntary unemployment?
A person who quits their job to pursue higher education.
ExplanationVoluntary unemployment occurs when individuals choose not to work, often for personal or educational reasons.
#6
Which of the following best describes cyclical unemployment?
It occurs when the economy is in recession.
ExplanationCyclical unemployment is tied to economic cycles, particularly recessions, and rises when overall economic activity declines.
#7
The natural rate of unemployment is comprised of which types of unemployment?
Structural and frictional unemployment
ExplanationThe natural rate includes structural and frictional unemployment, representing the baseline level even in a healthy economy.
#8
What is the Okun's Law used to explain?
The relationship between GDP growth and unemployment.
ExplanationOkun's Law describes the inverse relationship between GDP growth and the unemployment rate.
#9
Which of the following is NOT a consequence of long-term unemployment?
Decrease in the natural rate of unemployment.
ExplanationLong-term unemployment may have negative effects, but it doesn't lead to a decrease in the natural rate, which is a structural characteristic.
#10
What is the term for the unemployment rate that exists in an economy at full employment?
Natural unemployment rate
ExplanationThe natural unemployment rate is the level of unemployment that prevails in a healthy, fully employed economy.
#11
What is the impact of unemployment on the economy?
It leads to a decrease in aggregate demand.
ExplanationUnemployment reduces consumer spending, leading to lower aggregate demand and potentially worsening economic conditions.
#12
What is the Beveridge curve used to analyze?
The relationship between job vacancies and unemployment rates.
ExplanationThe Beveridge curve illustrates the inverse relationship between job vacancies and the unemployment rate, providing insights into labor market dynamics.
#13
Which of the following is a policy measure to address unemployment?
Reducing taxes to stimulate consumer spending.
ExplanationTax reductions can stimulate consumer spending, potentially boosting economic activity and employment.
#14
In the Phillips Curve, what does a point on the curve represent?
The direct relationship between inflation and unemployment.
ExplanationPoints on the Phillips Curve show the trade-off between inflation and unemployment—higher inflation tends to be associated with lower unemployment, and vice versa.
#15
What is the impact of technological advancement on unemployment?
It increases structural unemployment.
ExplanationTechnological advancement can lead to increased structural unemployment as automation and changes in skill requirements displace certain jobs.