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Causes of Unemployment

Description: This quiz aims to test your understanding of the various factors that contribute to unemployment in the economy.
Number of Questions: 15
Created by:
Tags: unemployment causes of unemployment labor economics
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Which of the following is NOT a type of unemployment?

  1. Frictional Unemployment

  2. Structural Unemployment

  3. Cyclical Unemployment

  4. Seasonal Unemployment

  5. Technological Unemployment

Show answer
Correct Option: E
Explanation:

Technological unemployment is not a type of unemployment. It refers to the loss of jobs due to technological advancements and automation.

Frictional unemployment is caused by:

  1. Changes in technology

  2. Changes in consumer preferences

  3. Changes in the business cycle

  4. Temporary job search

  5. Mismatch between skills and job requirements

Show answer
Correct Option: D
Explanation:

Frictional unemployment is caused by temporary job search and mismatch between skills and job requirements.

Structural unemployment is caused by:

  1. Changes in technology

  2. Changes in consumer preferences

  3. Changes in the business cycle

  4. Temporary job search

  5. Mismatch between skills and job requirements

Show answer
Correct Option: A
Explanation:

Structural unemployment is caused by changes in technology, changes in consumer preferences, and changes in the business cycle.

Cyclical unemployment is caused by:

  1. Changes in technology

  2. Changes in consumer preferences

  3. Changes in the business cycle

  4. Temporary job search

  5. Mismatch between skills and job requirements

Show answer
Correct Option: C
Explanation:

Cyclical unemployment is caused by changes in the business cycle.

Seasonal unemployment is caused by:

  1. Changes in technology

  2. Changes in consumer preferences

  3. Changes in the business cycle

  4. Temporary job search

  5. Mismatch between skills and job requirements

Show answer
Correct Option: B
Explanation:

Seasonal unemployment is caused by changes in consumer preferences.

Which of the following is NOT a policy to reduce unemployment?

  1. Expansionary fiscal policy

  2. Expansionary monetary policy

  3. Active labor market policies

  4. Minimum wage laws

  5. Unemployment insurance

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Correct Option: D
Explanation:

Minimum wage laws are not a policy to reduce unemployment. They can actually lead to higher unemployment by making it more expensive for firms to hire workers.

Expansionary fiscal policy can reduce unemployment by:

  1. Increasing aggregate demand

  2. Increasing the money supply

  3. Reducing interest rates

  4. All of the above

  5. None of the above

Show answer
Correct Option: D
Explanation:

Expansionary fiscal policy can reduce unemployment by increasing aggregate demand, increasing the money supply, and reducing interest rates.

Expansionary monetary policy can reduce unemployment by:

  1. Increasing aggregate demand

  2. Increasing the money supply

  3. Reducing interest rates

  4. All of the above

  5. None of the above

Show answer
Correct Option: D
Explanation:

Expansionary monetary policy can reduce unemployment by increasing aggregate demand, increasing the money supply, and reducing interest rates.

Active labor market policies can reduce unemployment by:

  1. Providing job training and placement assistance

  2. Reducing the cost of hiring workers

  3. Encouraging firms to create new jobs

  4. All of the above

  5. None of the above

Show answer
Correct Option: D
Explanation:

Active labor market policies can reduce unemployment by providing job training and placement assistance, reducing the cost of hiring workers, and encouraging firms to create new jobs.

Unemployment insurance can reduce unemployment by:

  1. Providing income support to unemployed workers

  2. Encouraging workers to search for new jobs

  3. Reducing the cost of hiring workers

  4. All of the above

  5. None of the above

Show answer
Correct Option: A
Explanation:

Unemployment insurance can reduce unemployment by providing income support to unemployed workers.

Which of the following is NOT a consequence of unemployment?

  1. Loss of income

  2. Increased poverty

  3. Social unrest

  4. Improved productivity

  5. Increased crime

Show answer
Correct Option: D
Explanation:

Improved productivity is not a consequence of unemployment.

Unemployment can lead to increased poverty by:

  1. Reducing the income of unemployed workers

  2. Increasing the cost of living

  3. Reducing the availability of jobs

  4. All of the above

  5. None of the above

Show answer
Correct Option: D
Explanation:

Unemployment can lead to increased poverty by reducing the income of unemployed workers, increasing the cost of living, and reducing the availability of jobs.

Unemployment can lead to social unrest by:

  1. Increasing frustration and anger among unemployed workers

  2. Reducing the legitimacy of the government

  3. Increasing the likelihood of crime and violence

  4. All of the above

  5. None of the above

Show answer
Correct Option: D
Explanation:

Unemployment can lead to social unrest by increasing frustration and anger among unemployed workers, reducing the legitimacy of the government, and increasing the likelihood of crime and violence.

Unemployment can lead to increased crime by:

  1. Reducing the income of unemployed workers

  2. Increasing the likelihood of poverty

  3. Increasing the likelihood of social unrest

  4. All of the above

  5. None of the above

Show answer
Correct Option: D
Explanation:

Unemployment can lead to increased crime by reducing the income of unemployed workers, increasing the likelihood of poverty, and increasing the likelihood of social unrest.

Which of the following is NOT a challenge in addressing unemployment?

  1. Identifying the causes of unemployment

  2. Designing effective policies to reduce unemployment

  3. Implementing policies effectively

  4. Overcoming political resistance to policies that reduce unemployment

  5. None of the above

Show answer
Correct Option: E
Explanation:

All of the options are challenges in addressing unemployment.

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