Question 1

When information about potential jobs is costly to acquire and individuals must spend time searching for jobs, which type of unemployment will result?

Accepted Answer

Frictional unemployment occurs when individuals are temporarily unemployed while transitioning between jobs or entering the workforce, often due to the time and effort required to find new employment.

Question 2

As the economy recovered from the 2008-2009 recession during 2010-2013 the employment/population ratio

Accepted Answer

The employment/population ratio remained well below the rates achieved prior to the recession. Even though the economy was improving and adding jobs during 2010-2013, it was not enough to bring the ratio back up to pre-recession levels. This indicates that there were still many people who had either given up searching for work or were unable to find employment.

Question 3

Which type of unemployment is most likely to help the economy become more efficient?

Accepted Answer

Frictional unemployment occurs due to people transitioning between jobs, and it occurs even when the economy is at full employment. This type of unemployment can help the economy become more efficient by allowing workers to find better-suited jobs, improving the allocation of resources, and increasing productivity in the long run.

Question 4

Which of the following about unemployment is true?

Accepted Answer

Even when a dynamic labor market is operating efficiently, there will always be some form of unemployment present. This could be due to structural or frictional factors, such as people changing careers or searching for new jobs, which may take some time. Therefore, option B is true. The other options are incorrect. Option A is incorrect because in an efficiently operating dynamic labor market, all forms of unemployment would be minimized. Option C is incorrect because even at full employment, there may still be some frictional or structural unemployment. Option D is incorrect because some frictional unemployment may still exist even in a situation of full employment. Option E is incorrect because there is no reason to believe that output cannot be sustained simply because full employment has been reached.

Question 5

Unemployment caused by people voluntarily quitting work in order to seek more attractive employment is called

Accepted Answer

Frictional unemployment is caused by people voluntarily quitting work in order to seek more attractive employment, so the best choice is D. The other options do not apply in this situation - the natural rate of unemployment is the amount of unemployment that exists when the economy is at full employment, full employment is the state in which all available labor resources are being used efficiently, cyclical unemployment is caused by fluctuations in the business cycle, and structural unemployment is caused by changes in the structure of the economy (such as the decline of a certain industry).

Question 6

Ashley was being treated unfairly by her boss, so she stormed off the job and two days later found another position. For two days, Ashley experienced

Accepted Answer

Ashley experienced frictional unemployment, as she voluntarily left her job in search of a better one. This is a type of unemployment that occurs when people are between jobs or entering the labor force for the first time.

Question 7

The employment/population ratio _____ between 1980 and 2000, but this ratio has _______ since 2000. (fill in the blanks)

Accepted Answer

The employment/population ratio rose between 1980 and 2000 due to economic growth and increased labor force participation, but it has fallen since 2000 due to factors like economic recessions and demographic changes.

Question 8

Suppose the population (age 16 and over) of Cameroon is 250 million; 10 million are unemployed, and 125 million hold jobs. The employment/population ratio in Cameroon is

Accepted Answer

The employment/population ratio is calculated by dividing the number of employed people by the total population and then multiplying by 100. Here, it is (125 million / 250 million) * 100 = 50 percent.

Question 9

The reduction of structural unemployment in the United States' economy may require

Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills and qualifications of workers and the jobs that are available. To address this issue, increased spending on worker retraining programs would help individuals gain the necessary skills to fill available jobs and reduce structural unemployment in the long term. A minimum wage increase, reduction in government spending, and decrease in interest rates would not directly address the issue of structural unemployment.

Question 10

The employment/population ratio is the number of persons employed divided by the number of persons

Accepted Answer

The employment/population ratio measures the proportion of the civilian population age 16 and over that is currently employed. Therefore, it is calculated by dividing the number of persons employed by the number of persons in the civilian population age 16 and over, which is choice D.

Question 11

Which of the following best explains why the rate of unemployment is highest among individuals aged 16 through 19?

Accepted Answer

The answer of Which of the following best explains why...

Question 12

If the official unemployment rate increases in March from its February level because of sluggish sales in the auto industry, we can conclude that ____ unemployment is responsible for the increase.

Accepted Answer

Cyclical unemployment is related to the ups and downs of the economy, such as sluggish sales in industries like the auto industry, which can lead to layoffs and increased unemployment.

Question 13

Suppose the population (age 16 and over) of Guatemala is 100 million; 5 million are unemployed, and 70 million hold jobs. The employment/population ratio of Guatemala is

Accepted Answer

The employment/population ratio is calculated by dividing the number of employed people by the total population (age 16 and over) and then multiplying by 100. Here, 70 million are employed out of a population of 100 million, so the ratio is (70/100) * 100 = 70 percent.

Question 14

A decrease in aggregate demand and the subsequent cutbacks in production lead to

Accepted Answer

A decrease in aggregate demand leads to cutbacks in production, which in turn leads to cyclical unemployment. Cyclical unemployment is caused by fluctuations in the overall economy, specifically changes in the business cycle.

Question 15

Frictional unemployment

Accepted Answer

The answer of Frictional unemployment
...

Question 16

The type of unemployment resulting from the fact that labor market information is less than perfect is called

Accepted Answer

Frictional unemployment occurs when individuals are temporarily out of work while searching for a new job or transitioning between jobs. This can result from imperfect information in the labor market, as individuals may not always be aware of all available job opportunities.

Question 17

If Trevon voluntarily quits one job, possesses marketable skills, and expects to find a new job in a few weeks, then Trevon is considered

Accepted Answer

Trevon's situation fits the definition of frictional unemployment, which refers to the temporary unemployment experienced by individuals who are between jobs or in the process of transitioning from one job to another.

Question 18

Gabriela, a brilliant new Ph.D. in economics, has turned down many job offers because she hopes eventually to teach at one of the top ten universities in her field. The type of unemployment she is experiencing is

Accepted Answer

Gabriela is experiencing frictional unemployment, which refers to the time lag between when a person leaves one job and finds another. Gabriela is unemployed by choice as she is willing to wait for a job offer from one of the top ten universities in her field. This type of unemployment is temporary and voluntary, as Gabriela has the skills and qualifications to find employment in her field, but is actively pursuing a specific job opportunity.

Question 19

In a dynamic economy under ideal conditions,

Accepted Answer

In a dynamic economy under ideal conditions, some unemployment would be present due to workers temporarily being out of work while changing jobs. This is because in a dynamic economy, there are constantly new opportunities and growth, which can lead to workers leaving their old jobs to pursue new ones. Therefore, some temporary unemployment is expected during this transition period. The other choices are not accurate as they suggest unrealistic scenarios.

Question 20

An individual should continue to spend time searching for a job as long as

Accepted Answer

Continuing to search for a job is only economically rational if the expected marginal benefit from additional search exceeds the marginal cost. In other words, if the effort required to search for additional job opportunities is greater than the potential gain from finding a better job, then it is not worth continuing the search. The other options presented (A, C, and D) are not necessarily sufficient reasons to continue searching for a job. For example, accepting a below-expected salary offer may still be a rational decision if the alternative is to remain unemployed. Similarly, job openings being available in the individual's field or additional information being available does not guarantee that a better job opportunity exists or that the cost of further search is worth the potential benefit.

Quiz 8: Economic Fluctuations, Unemployment, and Inflation