Unemployment

If people are made unemployed because of a fall in aggregate demand this is known as:

• Frictional unemployment

• Seasonal unemployment

• Cyclical unemployment

• Structural unemployment

Supply-side policies are most appropriate to cure:

• Involuntary unemployment

• Cyclical unemployment

• Voluntary unemployment

• A fall in aggregate demand

The natural rate of unemployment is likely to fall if:

• Unemployment benefits increase

• Income tax increases

• More training is available for the unemployed

• Geographical immobility increases

If there is cyclical unemployment in the economy the government might:

• Increase interest rates

• Encourage savings

• Cut income tax

• Reduce government spending

Which of the following is not a supply-side measure?

• Increased training

• Providing more information

• Helping individuals to move location to find work

• Increasing spending on existing industries

To reduce cyclical unemployment the government might:

• Increase the budget surplus

• Increase the balance of payments deficit

• Increase the budget deficit

• Reduce government expenditure

Jane is laid off from her work because the firm is moving to Mexico. Jane is

• Frictionally unemployed

• Structurally unemployed

• Cyclically unemployed

• Seasonally unemployed

• None of the above

Demand-side unemployment is partly caused by:

• Imperfections in the labour market

• Occupational and geographic immobility of factors

• Demographic changes

• A lack of aggregate demand

Which of the following is not a cost of unemployment?

• Loss of output within the economy

• Loss of tax revenue

• Loss of import flows

• Loss of profits

Which of the following might be used by government to lower unemployment?

• Reduce government spending

• Increase taxation

• Increase interest rates

• Lower taxation