Question 1

For twenty years, Jim was a customer service representation at a call center in Minnesota. In order to save money, his firm moved the call center to India and laid off Jim two years ago. Jim has been unable to find a similar job anywhere. Jim's unemployment is best classified as

Accepted Answer

Jim's unemployment is a result of the structural changes in the job market caused by his firm moving the call center to India. This type of unemployment is known as structural unemployment.

Question 2

According to the scenario above, in which of the following groups are all the people frictionally unemployed?

Accepted Answer

The answer of According to the scenario above, in which...

Question 3

Structural unemployment usually lasts ________ period of time ________ unemployment

Accepted Answer

Structural unemployment is caused by changes in the structure of an economy and can last for a longer period of time than frictional unemployment, which is caused by temporary factors such as job switching or seasonal work.

Question 4

The type of unemployment that arises from a decrease in real GDP is called

Accepted Answer

Cyclical unemployment arises during economic downturns when real GDP decreases and businesses lay off workers or reduce their hours. Frictional unemployment is caused by workers transitioning between jobs, structural unemployment is caused by a mismatch between the skills of workers and the jobs available in the economy, and non-expansion unemployment and downturn unemployment are not commonly used terms in economics.

Question 5

When the automobile replaced horse-drawn carriages as the principal means of transportation, firms producing horse-drawn carriages went bankrupt and permanently laid off all their workers, thereby increasing i. seasonal unemployment.
Ii. structural unemployment.
Iii. cyclical unemployment.

Accepted Answer

The displacement of workers due to technological advancement or changes in market demand is an example of structural unemployment, as their skills are no longer in demand. Seasonal unemployment is caused by fluctuations in demand within particular industries during specific seasons of the year, and cyclical unemployment is caused by economic downturns and fluctuations in the business cycle. Neither seasonal nor cyclical unemployment is applicable in the scenario described. Therefore, the correct answer is ii) only, structural unemployment.

Question 6

Which type of unemployment is most likely to lead unemployed workers to retrain or relocate?

Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills and locations of job seekers and those required by employers. This type of unemployment may incentivize workers to seek out retraining or relocate to a region where their skills are in-demand, as opposed to remaining unemployed for an extended period.

Question 7

During 2009, General Motors announced that it would close its Saturn facilities in the United States because of the foreign competition it faced. This corporate move

Accepted Answer

The closure of the Saturn facilities resulted in a permanent loss of jobs, which is an example of structural unemployment. These workers may find it difficult to find jobs in other industries, leading to a higher level of unemployment.

Question 8

John has been laid off from his job because of a general downturn in the economy. John's unemployment is best classified as

Accepted Answer

John's unemployment is due to a general downturn in the economy, which is a characteristic of cyclical unemployment. This type of unemployment is associated with changes in the overall level of economic activity and typically rises during recessions.

Question 9

After 15 years with Ford Motor Corporation, one summer Cameron loses his job. His boss explained that his position has been downsized after the technological advances in automobile production. Cameron is best considered

Accepted Answer

Cameron lost his job due to the downsizing of his position after technological advances in the automobile production. This type of unemployment is known as structural unemployment, where specific jobs become obsolete due to changes in technology or market conditions. Therefore, choice C is the best answer.

Question 10

The unemployment that fluctuates over the business cycle is called

Accepted Answer

Cyclical unemployment is the unemployment that fluctuates with the business cycle. It occurs due to changes in aggregate demand and can be reduced through fiscal and monetary policies. Frictional unemployment refers to the temporary unemployment of individuals who are in between jobs, structural unemployment is due to a mismatch between the skills of workers and the available jobs, full employment is the level of employment where there is no cyclical unemployment, and natural unemployment is the unemployment rate that exists when the economy is at full employment.

Question 11

In 2008 as the economy moved into a recession,

Accepted Answer

During a recession, businesses often experience a decline in demand for their products or services, leading them to lay off workers. This increases cyclical unemployment, which is unemployment resulting from fluctuations in the business cycle. Structural unemployment, which refers to a mismatch between the skills or location of workers and the available jobs, would not be affected by a general economic downturn. Natural unemployment, which includes frictional and structural unemployment, would not decrease during a recession. Frictional unemployment, which is unemployment resulting from people searching for new jobs or transitioning between jobs, may increase during a recession as more people enter the job market. Marginally attached workers, who are not included in the official unemployment rate but are only marginally attached to the labor force, may also increase during a recession as discouraged workers drop out of the labor force.

Question 12

Cyclical unemployment

Accepted Answer

Cyclical unemployment fluctuates over the business cycle, meaning it is higher during economic expansions and lower during recessions.

Question 13

Janae was fired from her job with Microsoft in the 2008-09 recession because Microsoft's sales dipped. Janae's unemployment would be best classified as

Accepted Answer

Janae's unemployment was caused by a downturn in the economy and the company's sales, making it cyclical unemployment. Frictional unemployment occurs when people are between jobs or searching for better employment opportunities, while structural unemployment is due to changes in the economy that render certain skills or jobs obsolete. Sales-related unemployment is not a recognized category, and natural unemployment refers to the unemployment rate that exists even in a healthy economy.

Question 14

Joann has just lost her job because her company was faced with more foreign competition and decided to restructure, which reduced the number of jobs at the company. Joann is

Accepted Answer

Joann's job loss is due to a restructuring and reduction in jobs at the company, indicating structural unemployment. Frictional unemployment is when individuals are temporarily without work due to a job search, transportation issues, or other factors unrelated to the overall economy. Cyclical unemployment is caused by fluctuations in the business cycle, such as a recession. International unemployment is not a commonly recognized category of unemployment.

Question 15

Cyclical unemployment is

Accepted Answer

Cyclical unemployment is caused by a downturn in the business cycle, specifically during a recession. It is separate from structural and frictional unemployment. Therefore, options A, B, D, and E are all incorrect.

Question 16

Cyclical unemployment includes people who become unemployed from

Accepted Answer

Cyclical unemployment occurs due to changes in the business cycle, specifically during economic downturns or recessions. As businesses struggle, they may lay off workers and reduce their workforce, leading to higher levels of unemployment.

Question 17

Which type of unemployment is the consequence of downturns in the business cycle?

Accepted Answer

Cyclical unemployment refers to the unemployment caused by fluctuations in the business cycle. During periods of economic downturn, businesses may lay off employees or reduce hiring, leading to increased unemployment.

Question 18

An economic recession produces

Accepted Answer

A recession is characterized by a decline in economic activity, which can lead to a decrease in demand for goods and services. This often results in businesses laying off workers, which increases the number of people who are unemployed due to the cyclical nature of the economy. Therefore, an economic recession produces an increase in cyclical unemployment.

Question 19

Joe has been unable to find a job because he lacks the necessary computer skills. Joe is

Accepted Answer

Joe's lack of computer skills indicates a structural mismatch between his skills and the demands of the labor market, making him structurally unemployed.

Question 20

During a recession, cyclical unemployment ________ and real GDP ________.

Accepted Answer

During a recession, businesses tend to cut back on production and lay off workers, which leads to an increase in cyclical unemployment. Additionally, decreased consumer spending and investment cause a decrease in real GDP. Therefore, choice B is the best answer.

Quiz 15: Jobs and Unemployment