Test Your Knowledge Unemployment

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Test Your KnowledgeUnemployment

• Click on the letter choices to test your
  understanding

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Question 1

• The labor force is

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• The sum of all people employed is employment.
  This is a measure of the proportion of the
  countrys working age population that is employed.

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• The unemployment rate is a measure of the
  unemployed and is calculated as a percentage by
  dividing the number of unemployed individuals by
  all individuals currently in the labor force.

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Correct!

• The labor force consists of everyone of working
  age who are actively employed or seeking
  employment. People who are not counted are
  students, retired people, stay-at-home parents,
  people in prisons or similar institutions, and
  discouraged workers who are unable to find work
  and have left the labor force.

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Question 2

• A person is counted as unemployed if

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• If someone is not looking for a job, for example
  a stay-at-home parent, they are not included in
  the labor force and therefore not counted as
  unemployed.

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• Someone who is under the age of 16 is legally
  too young to work and therefore not in the labor
  force.

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• A person who is without a job but available to
  work and has actively looked for employment in
  the past four weeks is counted as unemployed.
  People who are laid off but expecting to return
  to work are also counted as unemployed.

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Question 3

• A medical doctor working as a waiter would be
  considered

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• Underemployed workers may be workers who are
  working only part-time but would prefer a
  full-time job

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• Workers who are available for work and have
  searched for a job for at least some time during
  the last year, but who have become discouraged at
  their prospects of finding a job and left the
  labor force are known as discouraged workers.

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• A person who is without a job but available to
  work and has actively looked for employment in
  the past four weeks is counted as unemployed.

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Question 4

• Someone who is available for work, has searched
  for a job, found few prospects, and has left the
  labor force is considered

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• Underemployed workers may be workers who are
  working only part-time but who would prefer a
  full-time job, or workers who are highly skilled
  but are working in low-wage jobs that do no use
  those skills.

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• Workers who are available for work and have
  searched for a job for at least some time during
  the last year, but who have become discouraged at
  their prospects of finding a job and left the
  labor force, are known as discouraged workers.

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• A person who is without a job but available to
  work and has actively looked for employment in
  the past four weeks is counted as unemployed.

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Question 5

• The labor force participation rate identifies

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• The unemployment rate is a measure of the
  unemployed and is calculated as a percentage by
  dividing the number of unemployed individuals by
  all individuals currently in the labor force.

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• The employment rate is a statistical ratio that
  measures the proportion of the countrys working
  age population that is employed.

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• The labor force participation rate identifies
  what percentage of the adult population is in the
  labor force. It is calculated by dividing the
  labor force by the adult population, and then
  multiplying by 100.

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Question 6

• When workers lack the skills necessary to get a
  job, they are ________________ unemployed.

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Correct!

• Structural unemployment occurs when workers have
  skills that are obsolete or no longer demanded by
  employers, when they lack the skills necessary to
  get a job, or when they cannot move to a new
  location to find work. Efficiency wages, a
  binding minimum wage, labor unions and
  unemployment insurance may also contribute to
  structural unemployment.

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• Frictional unemployment is the result of workers
  searching for jobs, or waiting for new jobs to
  begin. Frictional unemployment is often called
  job search unemployment.

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• Cyclical unemployment occurs when workers are
  unemployed as a result of economic changes
  associated with the business cycle. At times,
  economic conditions can cause the aggregate
  demand for goods and services to decline,
  therefore lowering the demand for labor needed to
  produce these goods and services.

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Question 7

• New and recent entrants into the labor force are
  ________________ unemployed.

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• Structural unemployment occurs when workers have
  skills that are obsolete or no longer demanded by
  employers, when they lack the skills necessary to
  get a job, or when they cannot move to a new
  location to find work. Efficiency wages, a
  binding minimum wage, labor unions and
  unemployment insurance may also contribute to
  structural unemployment.

Back
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Correct!

• Frictional unemployment is the result of workers
  searching for jobs, or waiting for new jobs to
  begin. Frictional unemployment is often called
  job search unemployment.

Next
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• Cyclical unemployment occurs when workers are
  unemployed as a result of economic changes
  associated with the business cycle. At times,
  economic conditions can cause the aggregate
  demand for goods and services to decline,
  therefore lowering the demand for labor needed to
  produce these goods and services.

Back
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Question 8

• ________ unemployment occurs when workers are
  displaced as a result of economic changes
  associated with the business cycle.

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• Structural unemployment occurs when workers
  have skills that are obsolete or no longer
  demanded by employers, when they lack the skills
  necessary to get a job, or when they cannot move
  to a new location to find work. Efficiency wages,
  a binding minimum wage, labor unions and
  unemployment insurance may also contribute to
  structural unemployment.

Back
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• Frictional unemployment is the result of workers
  searching for jobs, or waiting for new jobs to
  begin. Frictional unemployment is often called
  job search unemployment.

Back
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Correct!

• Cyclical unemployment occurs when workers are
  unemployed as a result of economic changes
  associated with the business cycle. At times,
  economic conditions can cause the aggregate
  demand for goods and services to decline,
  therefore lowering the demand for labor needed to
  produce these goods and services.

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Question 9

• Any deviation from the natural rate of
  unemployment is ___________ unemployment.

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• This type of unemployment is caused by
  structural factors in the economy such as worker
  skills mismatch, efficiency wages, a binding
  minimum wage, labor unions, and unemployment
  insurance.

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• Frictional unemployment results when workers are
  searching for a job, or waiting for a job to
  begin.

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• The natural rate of unemployment is the lowest
  rate of unemployment over the long run, often
  thought of as the rate of unemployment that
  usually occurs in the economy. Deviations from
  this rate are cyclical unemployment.

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Question 10

• The unemployment rate is closely tied to Real
  GDP. If Real GDP falls

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• A decrease in Aggregate Demand is associated with
  falling Real GDP.

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• When Real GDP falls, output declines. This means
  that fewer workers will be needed to produce
  goods and services and unemployment should rise.

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• When Real GDP rises, this indicates an increase
  in Aggregate Demand and greater output in the
  economy. This should lead to a decrease in
  unemployment as more workers are hired to meet
  the increased demand for goods and services.

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