Causes of Unemployment Quiz

What is frictional unemployment?

• Unemployment due to a lack of demand in the economy

• Unemployment caused by the time taken to move between jobs

• Unemployment due to high wages

• Unemployment caused by technological change

Which of the following is a cause of structural unemployment?

• Economic recession

• High minimum wages

• Mismatch of skills in the labor market

• Generous unemployment benefits

What is classical or real-wage unemployment?

• Unemployment caused by voluntary choice

• Unemployment due to economic downturns

• Unemployment caused by high wages above equilibrium

• Unemployment due to a mismatch of skills

What is voluntary unemployment?

• Unemployment when people choose not to work

• Unemployment due to technological advancements

• Unemployment caused by high wages

• Unemployment due to lack of skills

What is demand deficient or cyclical unemployment?

• Unemployment caused by technological change

• Unemployment due to high wages

• Unemployment caused by a lack of demand in the economy

• Unemployment due to voluntary choice

Which factor is NOT a cause of structural unemployment?

• Generous unemployment benefits

• Occupational immobilities

• Geographical immobilities

• Technological change

What is the main cause of unemployment in the UK according to the text?

• Frictional factors

• Voluntary factors

• Cyclical factors

• Structural factors

What does the efficiency wage theory suggest?

• Wage cuts lead to lower worker morale and productivity

• Wage increases lead to inflation

• Lower wages lead to higher productivity

• Higher wages lead to higher unemployment

What is a potential consequence of cutting wages according to Keynesian economists?

• Higher aggregate demand

• Lower consumer spending

• Increased consumer spending

• Increased employment

What is a characteristic of frictional unemployment?

• It is short-term and transitional

• It is caused by high wages

• It is caused by economic downturns

• It is long-term and persistent