Economics 7.2 The Major Types of Unemployment – Flashcards
Unlock all answers in this set
Unlock answersquestion
Suppose that a nation has a labor force of 100 people. In January, Amy, Barbara, Carine, and Denise are unemployed; in February, those four find jobs, but Evan, Francesco, George, and Horatio become unemployed. Suppose further that every month, the previous four who were unemployed find jobs and four different people become unemployed. Throughout the year, however, the same three people long dash Ito, Jack, and Kelley long dash
continually remain unemployed because their skills are a poor match with employers' requirements.
answer
Frictional Unemployment rate= Frictional Unemployment / Labor Force x 100
1. 4%
2. 3%
3. 7%
question
Suppose you are given the following information about a country:
answer
Add them all together
question
Internet job sites, like Monster.com, have led potential employees to find jobs via the internet almost instantly. This has caused
answer
a fall in frictional unemployement
question
The type of unemployment that rises as the economy goes into a recession is called
answer
cyclical
question
By providing information and reducing the costs of job search, the Internet's impact on the job market is to reduce
answer
frictional
question
The economy of Finlandia is at full employment when
answer
there is some unemployment due to friction in the labor market, but there is no cyclical unemployment.
question
Which of the following measures will lower the natural rate of unemployment?
answer
More high school graduates enter college without looking for employment right away.
question
Consider an economy where the natural rate of unemployment is equal to 5%.
If the actual unemployment rate is equal to 7%, then
answer
cyclical unemployment rate is 2%
question
Full employment means
answer
there is a level of unemployment consistent with "normal" frictions in the labor market.
question
Unemployment due to the fact that workers must search for appropriate job offers is called frictional unemployment.
answer
True
question
Structural unemployment is related to the movement of workers from low-paying to high-paying jobs.
answer
False
question
Cyclical unemployment results from business recessions.
answer
True
question
When the economy is at full employment, the unemployment rate is zero
answer
False
question
The natural rate of unemployment includes
answer
frictional and structural unemployment
question
__________unemployment occurs because of transaction costs in the labor market. For example, workers do not have full information about vacancies and must search for jobs.
___________ unemployment occurs when there is a poor match of workers' skills and abilities with available jobs, perhaps because workers lack appropriate training or government labor rules reduce firms' willingness to hire.
The levels of frictional and structural unemployment are used in part to determine our (somewhat arbitrary) measurement of the ______________
answer
Frictional
Structural
Natural
