Low Unemployment

Unemployment is defined as  

• the percentage of people in the population who do not have a job

• the percentage of people in the labour force who do not have a job

• the percentage of people in the population who do not have a job and are actively looking for one

• the percentage of people in the labour force who do not have a job and are actively looking for one

Hidden unemployment does not refer to

• unemployed workers who have given up looking for a job

• workers who are no longer satisfied with the job they have

• part-time workers who would rather be working full time

• workers who are working in a different field than what they were trained to do

Consequences of unemployment include

• loss of real GDP and loss of workers' income

• loss of government tax revenues and increased burden on the budget of unemployment benefits

• a great inequality in the distribution of income and increased poverty

• all of the above

Cyclical unemployment is caused by

• a fall in aggregate demand

• a fall in long run aggregate supply

• labour market rigidities

• changes in the demand for labour skills

Which of the following is not included in natural unemployment?

• fricitional unemployment

• seasonal unemployment

• demand-deficient unemployment

• structural unemployment

Which of the following is not a cause of structural unemployment?

• high minimum wages

• technological change that replaces labour with machines

• a firm moves to a different location

• workers in ski resorts lose their jobs during the summer

In Country X, the labour force is 40% of a population of 5 million people, the unemployed are 200,000 and discouraged workers are 50,000. The unemployment rate is:

 

• 10%

• 4%

• 12.5%

• 5%

Two economic costs of unemployment include

• a loss of real output and a more unequal distribution of income

• increased government payments for unemployment benefits and higher inflation

• a loss of tax revenue for the government and an increase in imports

• a loss income for the unemployed and a smaller labour force

Structural unemployment can arise from

• a change in demand for certain skills provided by labour

• large firms moving away from their current geographical region

• labour market rigidities

• all of the above

If someone quits their job in search of a better job, they become

• seasonally unemployed

• frictionally unemployed

• structurally unemployed

• cyclically unemployed