6.3 Unemployment and Full Employment
1) Frictional unemployment is the result of
A) an economic recession.
B) the economic decline of major industries.
C) the normal process of jobs being created and destroyed.
D) people not getting along (having friction) with their employers.
E) changing weather throughout the year.
2) As firms search for the best employee to fill an opening and the unemployed search for the job that best fits their skills, the economy experiences
A) structural unemployment.
B) frictional unemployment.
C) cyclical unemployment.
D) changes in the business cycle.
E) avoidable unemployment.
3) Frictional unemployment is the result of
A) technological change or foreign competition.
B) normal labor market turnover.
C) a slowdown in the rate of economic expansion.
D) the economy entering a strong expansion.
E) changes in the weather.
4) ________ unemployment changes slowly and depends on ________.
A) Frictional; the skills of the unemployed
B) Seasonal; the rate at which people enter and exit the labor force
C) Frictional; the rate at which people enter and exit the labor force
D) Structural; the rate at which people enter the labor force
E) Structural; the inflation rate
5) The ongoing normal creation and destruction of jobs creates
A) frictional unemployment.
B) structural unemployment.
C) avoidable unemployment.
D) cyclical unemployment.
E) destructive unemployment.
6) Which type of unemployment is a permanent and healthy phenomenon in a dynamic economy?
A) cyclical
B) avoidable
C) structural
D) frictional
E) unavoidable
7) The amount of frictional unemployment depends on
A) the phase of the business cycle.
B) the time of the year.
C) international competition.
D) demographic factors and unemployment benefits.
E) Both answers A and B are correct.
8) A reduction in unemployment benefits will
A) decrease the amount of frictional unemployment.
B) increase the amount of frictional unemployment.
C) not change the amount of frictional unemployment because unemployment benefits affects only cyclical unemployment.
D) not change the amount of frictional unemployment because unemployment benefits affects only structural unemployment.
E) increase the amount of cyclical unemployment.
9) Bill just graduated with his degree in economics. Through Career Services he submitted his resume to several companies and he will visit them during the next two weeks. Bill is considered
A) not in the labor force.
B) frictionally unemployed.
C) structurally unemployed.
D) cyclically unemployed.
E) employed because he is visiting firms.
10) Which of the following would be considered unemployed as part of normal labor market turnover?
i)Juliet, who was fired when the company where she worked went bankrupt in a recession
ii)Hannah, who quit her job to find one that better suited her skills
iii)Charlotte, who started looking for a job upon graduation from high school
A) ii and iii
B) i and ii
C) i, ii and iii
D) i and iii
E) iii only
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