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Unemployment and Its Measurement

Description: This quiz covers the concepts and methods related to unemployment and its measurement.
Number of Questions: 15
Created by:
Tags: unemployment labor economics economic indicators
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What is the official definition of unemployment used by the U.S. Bureau of Labor Statistics?

  1. A person who is actively looking for work but is not currently employed.

  2. A person who is not currently employed and is available to work.

  3. A person who is not currently employed and has been actively looking for work for at least four weeks.

  4. A person who is not currently employed and has been actively looking for work for at least six months.

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Correct Option: B
Explanation:

The official definition of unemployment used by the U.S. Bureau of Labor Statistics is a person who is not currently employed and is available to work.

What is the difference between unemployment and underemployment?

  1. Unemployment is when a person is not working, while underemployment is when a person is working but not earning enough to support themselves.

  2. Unemployment is when a person is not working, while underemployment is when a person is working but not earning enough to support their family.

  3. Unemployment is when a person is not working, while underemployment is when a person is working but not earning enough to support their desired lifestyle.

  4. Unemployment is when a person is not working, while underemployment is when a person is working but not earning enough to support their basic needs.

Show answer
Correct Option: A
Explanation:

Unemployment is when a person is not working, while underemployment is when a person is working but not earning enough to support themselves.

What are the three main types of unemployment?

  1. Frictional, structural, and cyclical

  2. Frictional, seasonal, and cyclical

  3. Frictional, structural, and technological

  4. Frictional, seasonal, and technological

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Correct Option: A
Explanation:

The three main types of unemployment are frictional, structural, and cyclical.

What is frictional unemployment?

  1. Unemployment that occurs when workers are moving between jobs.

  2. Unemployment that occurs when workers are laid off due to changes in technology.

  3. Unemployment that occurs when workers are laid off due to changes in the economy.

  4. Unemployment that occurs when workers are laid off due to changes in the weather.

Show answer
Correct Option: A
Explanation:

Frictional unemployment is unemployment that occurs when workers are moving between jobs.

What is structural unemployment?

  1. Unemployment that occurs when workers are laid off due to changes in technology.

  2. Unemployment that occurs when workers are laid off due to changes in the economy.

  3. Unemployment that occurs when workers are laid off due to changes in the weather.

  4. Unemployment that occurs when workers are laid off due to changes in government policy.

Show answer
Correct Option: A
Explanation:

Structural unemployment is unemployment that occurs when workers are laid off due to changes in technology.

What is cyclical unemployment?

  1. Unemployment that occurs when workers are laid off due to changes in the economy.

  2. Unemployment that occurs when workers are laid off due to changes in the weather.

  3. Unemployment that occurs when workers are laid off due to changes in government policy.

  4. Unemployment that occurs when workers are laid off due to changes in consumer preferences.

Show answer
Correct Option: A
Explanation:

Cyclical unemployment is unemployment that occurs when workers are laid off due to changes in the economy.

What is the unemployment rate?

  1. The percentage of the labor force that is unemployed.

  2. The percentage of the population that is unemployed.

  3. The percentage of the labor force that is employed.

  4. The percentage of the population that is employed.

Show answer
Correct Option: A
Explanation:

The unemployment rate is the percentage of the labor force that is unemployed.

How is the unemployment rate calculated?

  1. By dividing the number of unemployed people by the number of people in the labor force.

  2. By dividing the number of unemployed people by the number of people in the population.

  3. By dividing the number of employed people by the number of people in the labor force.

  4. By dividing the number of employed people by the number of people in the population.

Show answer
Correct Option: A
Explanation:

The unemployment rate is calculated by dividing the number of unemployed people by the number of people in the labor force.

What is the natural rate of unemployment?

  1. The lowest level of unemployment that can be achieved without causing inflation.

  2. The lowest level of unemployment that can be achieved without causing deflation.

  3. The lowest level of unemployment that can be achieved without causing a recession.

  4. The lowest level of unemployment that can be achieved without causing a depression.

Show answer
Correct Option: A
Explanation:

The natural rate of unemployment is the lowest level of unemployment that can be achieved without causing inflation.

What are some of the factors that affect the natural rate of unemployment?

  1. The rate of technological change.

  2. The rate of population growth.

  3. The rate of inflation.

  4. The rate of interest.

Show answer
Correct Option:
Explanation:

The natural rate of unemployment is affected by a number of factors, including the rate of technological change, the rate of population growth, the rate of inflation, and the rate of interest.

What are some of the consequences of unemployment?

  1. Lost income.

  2. Increased poverty.

  3. Increased crime.

  4. Increased social unrest.

Show answer
Correct Option:
Explanation:

Unemployment can have a number of negative consequences, including lost income, increased poverty, increased crime, and increased social unrest.

What are some of the policies that can be used to reduce unemployment?

  1. Expansionary fiscal policy.

  2. Expansionary monetary policy.

  3. Structural reforms.

  4. All of the above.

Show answer
Correct Option: D
Explanation:

There are a number of policies that can be used to reduce unemployment, including expansionary fiscal policy, expansionary monetary policy, and structural reforms.

What are some of the challenges in measuring unemployment?

  1. Defining who is unemployed.

  2. Collecting accurate data on unemployment.

  3. Interpreting the data on unemployment.

  4. All of the above.

Show answer
Correct Option: D
Explanation:

There are a number of challenges in measuring unemployment, including defining who is unemployed, collecting accurate data on unemployment, and interpreting the data on unemployment.

Why is it important to measure unemployment?

  1. To understand the state of the economy.

  2. To design policies to reduce unemployment.

  3. To track the progress of the economy.

  4. All of the above.

Show answer
Correct Option: D
Explanation:

It is important to measure unemployment in order to understand the state of the economy, to design policies to reduce unemployment, and to track the progress of the economy.

What are some of the limitations of the unemployment rate as a measure of economic well-being?

  1. It does not include people who are underemployed.

  2. It does not include people who are discouraged from working.

  3. It does not include people who are working in the informal economy.

  4. All of the above.

Show answer
Correct Option: D
Explanation:

The unemployment rate has a number of limitations as a measure of economic well-being, including the fact that it does not include people who are underemployed, people who are discouraged from working, and people who are working in the informal economy.

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