4.2.2 Types of Unemployment

• What is the definition of unemployment?

  Without a job and actively seeking employment
• Discouraged workers are included in the unemployment rate

  False
• Technological change can lead to structural unemployment by making certain jobs obsolete
• Changes in consumer demand can cause structural unemployment

  True
• What type of programs can address structural unemployment?

  Education and training
• Frictional unemployment is always a negative sign for the economy

  False
• Match the type of unemployment with its cause:

  Cyclical unemployment ↔️ Economic downturns

  Seasonal unemployment ↔️ Seasonal variations in demand
• Reduced consumer spending is a key cause of cyclical unemployment
• How does technological change lead to structural unemployment?

  Automating jobs and requiring new skills
• Why does globalization contribute to structural unemployment?

  Jobs shift to lower-cost countries
• Structural unemployment is caused by a mismatch between the skills of workers and the skills demanded by employers
• Long-term unemployment is a consequence of structural unemployment.


  True
• What type of unemployment occurs as people change jobs or enter the workforce for the first time?

  Frictional unemployment
• One cause of frictional unemployment is the time workers take to find the right job match, also known as the job search process
• Reduced income and decreased standard of living are consequences of cyclical unemployment.


  True
• What is an example of seasonal unemployment caused by weather conditions?

  Snow preventing construction
• Income instability is a consequence of seasonal unemployment for workers.

  True
• Technological unemployment is specifically related to technology-related changes
• What is the main reason for voluntary unemployment?

  Personal preferences
• Voluntary unemployment is not considered a significant economic problem because it is a personal choice.

  True
• Unemployment is expressed as a percentage
• What is structural unemployment caused by?

  Mismatch between skills and demand
• How does globalization contribute to structural unemployment?

  Shifting jobs to lower-cost countries
• Consequences of structural unemployment in order of severity

  1️⃣ Long-term unemployment

  2️⃣ Skill mismatch

  3️⃣ Economic and social costs
• Frictional unemployment occurs as people change jobs
• What factors can cause frictional unemployment?

  Job search and geographical mobility
• What is cyclical unemployment caused by?

  Economic downturns and recessions
• Consequences of cyclical unemployment in order of severity

  1️⃣ Lower output

  2️⃣ Reduced income

  3️⃣ Increased poverty
• Long-term unemployment is a consequence of structural unemployment

  True
• A decline in demand for a product can lead to job losses and structural unemployment
• What is a major cause of structural unemployment related to technology?

  Technological change
• Addressing structural unemployment often requires investment in education, training, and retraining
• Frictional unemployment is generally temporary and can indicate an efficient job market.


  True
• What is the primary cause of cyclical unemployment?

  Economic downturns
• Seasonal unemployment occurs due to seasonal fluctuations in demand, such as in agriculture, tourism, or construction
• What is the term for unemployment caused by new technologies and automation replacing human labor?

  Technological unemployment
• Increased income inequality is a consequence of technological unemployment.


  True
• Older workers may voluntarily leave the workforce upon reaching retirement