Question 1

One way for governments to try and minimize the effects of structural unemployment is to:

Accepted Answer

All of the listed options (providing information about in-demand professions, subsidizing retraining programs, and offering low-interest loans for education) can help minimize the effects of structural unemployment. By helping workers gain new skills and qualifications, they become more competitive in the job market and can better adapt to changes in the economy.

Question 2

Carol is a coal miner who just got laid off when the last coal mine in the area was shut down. She has looked everywhere for another job as a miner, but cannot find one. Given that Carol is unlikely to find another job as a miner, she would be considered:

Accepted Answer

Carol's unemployment is due to structural changes in the economy, specifically the decline of the coal mining industry in the area. This type of unemployment is known as structural unemployment, which occurs when there is a mismatch between the skills of workers and the needs of the economy. Frictional unemployment refers to the temporary unemployment that occurs when workers are searching for new jobs. Real-wage unemployment occurs when the labor market is unable to adjust to changes in real wage rates. Carol being a discouraged worker means that she has given up looking for work, but it does not specifically describe the type of unemployment she is facing.

Question 3

When the economy is going strong the:

Accepted Answer

When the economy is going strong, businesses are expanding and production is increasing, which leads to an increase in demand for workers. As a result, employers may offer higher wages and benefits to attract and retain employees.

Question 4

Sue just quit her job as a librarian to pursue her lifelong dream of getting a job as a teacher. Sue would be considered:

Accepted Answer

Sue is frictionally unemployed because she voluntarily resigned from her job as a librarian to pursue a new career path as a teacher. She is actively seeking new employment and is temporarily between jobs, which fits the definition of frictional unemployment.

Question 5

Don worked as a machinist all his life, and was recently laid off because his plant closed and the jobs were outsourced to India. There don't seem to be any machinist jobs in the area anymore. Don would be considered:

Accepted Answer

Don is structurally unemployed because the industry he worked in (machinist) has declined in the area due to outsourcing. This is a long-term shift in the job market, making it difficult for him to find employment in his field. Frictional unemployment refers to temporary unemployment between jobs, real-wage unemployment occurs when wages are artificially high and discourage employers from hiring workers, and a discouraged worker has given up looking for employment.

Question 6

When the economy slows down the:

Accepted Answer

When the economy slows down, businesses have less demand for goods and services, which leads to a decrease in demand for workers. Companies may begin laying off employees, offering fewer work hours, or simply not hiring new workers. This results in a decrease in the demand for workers.

Question 7

Bob just graduated from college and has just landed his first job with a local accounting firm that will start in three months. Bob plans to use that time to find a place to live, and adjust to the new area. Bob would be considered:

Accepted Answer

The answer of Bob just graduated from college and has...

Question 8

Sonia was a great bookkeeper 20 years ago, then left the workforce to stay home and raise her children. Now that they're in college, Sonia looks for another bookkeeping job, but they all require computer skills that she doesn't have. Sonia would be considered:

Accepted Answer

Sonia is structurally unemployed because her lack of computer skills means she does not have the necessary qualifications for the bookkeeping jobs she is applying for. This is an example of structural unemployment, which occurs when a worker's skills do not match the requirements of available jobs.

Question 9

Real-wage unemployment can be caused by which of the following?

Accepted Answer

Minimum wage laws can cause real-wage unemployment because they increase the cost of hiring workers. Employers may be unwilling to hire as many workers at the higher wage, leading to unemployment among low-skilled and entry-level workers. Retraining programs and low-interest student loans are not directly related to real-wage unemployment.

Question 10

When governments provide information to unemployed people about which professions are experiencing rising demand for labor, they are trying to minimize the effects of which kind of unemployment?

Accepted Answer

Governments providing information to unemployed people about rising demand for labor in certain professions is an attempt to minimize the effects of structural unemployment, which occurs when workers' skills do not match those required for available job openings.

Question 11

The business cycle matters for unemployment because:

Accepted Answer

The business cycle affects the demand for labor as economic expansions typically increase demand for labor, reducing unemployment, while recessions decrease demand, increasing unemployment.

Question 12

When the economy is going strong:

Accepted Answer

When the economy is going strong, firms tend to expand their operations. This means they are increasing their production capacity, which requires hiring more workers and investing in new equipment and facilities. As a result, there is an increase in demand for workers, leading to lower unemployment rates and higher GDP growth.

Question 13

Cyclical unemployment is:

Accepted Answer

Cyclical unemployment is caused by short-term economic fluctuations reflected in GDP growth. It occurs when there is a downturn in the business cycle, causing firms to reduce production and lay off workers. As a result, workers are left unemployed until the economy recovers and businesses begin hiring again.

Question 14

When the economy goes through ups and downs over time:

Accepted Answer

Economists call the pattern of ups and downs in the economy the business cycle. Choices A and C are incorrect as changes in GDP growth are a reflection of the overall state of the economy and the supply of labor may be affected, but that is not the defining factor of the business cycle.

Question 15

Fred was working as a sales rep for a firm, and just completed an MBA by taking courses at night. Fred quits his job to pursue a management position. Fred would be considered:

Accepted Answer

Fred's situation fits the definition of frictional unemployment, which refers to individuals who are temporarily unemployed while transitioning from one job to another. In Fred's case, he quit his job to pursue a higher-level position, and his recent completion of an MBA suggests that he is actively seeking employment.

Question 16

One way for governments to try and minimize the effects of structural unemployment is to:

Accepted Answer

Subsidizing retraining programs can help workers who have lost their jobs due to structural changes in the economy to gain new skills and qualifications that are in demand in the labor market. This can improve their employability and help reduce structural unemployment. Increasing unemployment benefits might provide temporary relief to individuals who are unemployed, but it does not address the underlying causes of structural unemployment. Mandating that employers cannot fire anyone is not a feasible solution as it may lead to inefficiencies and discourage companies from making necessary changes to remain competitive.

Question 17

Classical unemployment can be caused by which of the following?

Accepted Answer

Minimum wage laws, bargaining by unions, and efficiency wages all contribute to classical unemployment. Minimum wage laws can lead to higher wages than the market equilibrium, causing firms to employ fewer workers, resulting in unemployment. Bargaining by unions can lead to higher wages, making firms less inclined to hire workers, leading to unemployment. Efficiency wages involve paying workers more than the market equilibrium to increase productivity, leading to unemployment for those who cannot meet the higher productivity standards. Thus, all of these choices create classical unemployment.

Question 18

When governments subsidize retraining programs for unemployed workers to learn new skills, they are trying to minimize the effects of which kind of unemployment?

Accepted Answer

Governments subsidize retraining programs for unemployed workers to learn new skills in order to minimize the effects of structural unemployment, which arises from a mismatch between the skills of the workforce and the requirements of available jobs. Retraining helps workers develop the skills necessary to fill open jobs in sectors with a shortage of skilled workers, thereby reducing structural unemployment.

Question 19

Sarah used to be a music teacher at a local school, but got let go last year due to budget cuts. Sarah now works part-time as a waitress while looking for another teaching job. Sarah would be considered:

Accepted Answer

Sarah is considered underemployed because she is working part-time as a waitress while looking for another teaching job that would fully utilize her skills and education. She is not completely jobless, but her current job does not match her qualifications and desired level of employment.

Question 20

When the economy slows down:

Accepted Answer

When the economy slows down, firms contract their operations, which leads to a decrease in demand for workers. This decrease in demand for workers and overall decrease in economic activity results in slowing or negative GDP growth. Therefore, all of the given options are true when the economy slows down.

Quiz 9: Unemployment and the Labor Market

One way for governments to try and minimize the effects of structural unemployment is to:

Carol is a coal miner who just got laid off when the last coal mine in the area was shut down. She has looked everywhere for another job as a miner, but cannot find one. Given that Carol is unlikely to find another job as a miner, she would be considered:

When the economy is going strong the:

Sue just quit her job as a librarian to pursue her lifelong dream of getting a job as a teacher. Sue would be considered:

Don worked as a machinist all his life, and was recently laid off because his plant closed and the jobs were outsourced to India. There don't seem to be any machinist jobs in the area anymore. Don would be considered:

When the economy slows down the:

Bob just graduated from college and has just landed his first job with a local accounting firm that will start in three months. Bob plans to use that time to find a place to live, and adjust to the new area. Bob would be considered:

Sonia was a great bookkeeper 20 years ago, then left the workforce to stay home and raise her children. Now that they're in college, Sonia looks for another bookkeeping job, but they all require computer skills that she doesn't have. Sonia would be considered:

Real-wage unemployment can be caused by which of the following?

When governments provide information to unemployed people about which professions are experiencing rising demand for labor, they are trying to minimize the effects of which kind of unemployment?

The business cycle matters for unemployment because:

When the economy is going strong:

Cyclical unemployment is:

When the economy goes through ups and downs over time:

Fred was working as a sales rep for a firm, and just completed an MBA by taking courses at night. Fred quits his job to pursue a management position. Fred would be considered:

One way for governments to try and minimize the effects of structural unemployment is to:

Classical unemployment can be caused by which of the following?

When governments subsidize retraining programs for unemployed workers to learn new skills, they are trying to minimize the effects of which kind of unemployment?

Sarah used to be a music teacher at a local school, but got let go last year due to budget cuts. Sarah now works part-time as a waitress while looking for another teaching job. Sarah would be considered:

When the economy slows down: