2.2 Unemployment

• Unemployment refers to the state of being without a job while actively seeking employment
• Cyclical unemployment rises during economic expansions

  False
• Technological changes can cause structural unemployment


  True
• The unemployment rate is calculated as the percentage of the labor force that is unemployed and actively seeking work


  True
• Structural unemployment is caused by a mismatch between the skills of workers and the skills demanded by employers
• Frictional unemployment is caused by workers transitioning between jobs
• Cyclical unemployment increases during economic recessions
• The unemployment rate includes discouraged workers who have stopped looking for jobs

  False
• Unemployment refers to the state of being without a job
• Structural unemployment is caused by a mismatch between worker skills and employer needs
• Underemployment refers to people working part-time who want full-time work
• Structural unemployment is often caused by a mismatch between worker skills and employer needs
• Unemployment leads to increased poverty rates and income inequality
• Government spending on unemployment benefits reduces public resources.


  True
• Strain on social services is a societal cost of unemployment.


  True
• Structural unemployment is caused by technological changes or shifts in consumer demand.

  True
• The formula for calculating the unemployment rate is: (Number of Unemployed / Total Labor Force) × 100
• The causes of unemployment can be grouped into three main types: frictional, structural, and cyclical
• Unemployment leads to reduced economic growth due to lower aggregate demand
• What are the four types of government policies used to reduce unemployment?

  Fiscal, monetary, labor market, education/training
• What is the goal of education and training policies in reducing unemployment?

  Match skills with job needs
• Frictional unemployment is caused by technological changes and shifts in consumer demand

  False
• Order the three main types of unemployment based on their primary causes:

  1️⃣ Workers transitioning between jobs

  2️⃣ Mismatch between skills and demand

  3️⃣ Fluctuations in aggregate demand
• Match the type of unemployment with its definition:

  Frictional ↔️ Short-term unemployment due to job changes

  Structural ↔️ Unemployment caused by a skills mismatch

  Cyclical ↔️ Unemployment tied to the business cycle
• The formula for the unemployment rate is \frac{\text{Number of Unemployed}}{\text{Total Labor Force}} \times 100</latex>
• What is cyclical unemployment caused by?

  Business cycle fluctuations
• Frictional unemployment is caused by technological changes.

  False
• The unemployment rate includes discouraged workers.

  False
• Match the type of unemployment with its primary cause:

  Frictional ↔️ Job transitions

  Structural ↔️ Technological changes

  Cyclical ↔️ Economic recessions
• What is the effect of unemployment on economic growth?

  Reduced GDP
• How does unemployment affect household incomes?

  Reduces household income
• Frictional unemployment is caused by workers changing jobs or new entrants to the workforce
• What does the unemployment rate measure?

  Level of unemployment
• Why should the unemployment rate be interpreted alongside other economic indicators?

  To provide a comprehensive understanding
• What are the economic effects of unemployment?

  Reduced economic growth
• Match the societal effect of unemployment with its description:

  Higher Stress ↔️ Strain on mental health

  Increased Crime ↔️ Desperation for resources

  Strain on Social Services ↔️ Demand for support increases
• Lower interest rates are a monetary policy tool used to encourage borrowing and investment.


  True
• Changes in labor force participation rates can affect the calculated unemployment rate
• Match the type of unemployment with its definition:

  Frictional ↔️ Short-term unemployment due to job changes

  Structural ↔️ Unemployment caused by skill mismatch

  Cyclical ↔️ Unemployment tied to business cycle
• How is the unemployment rate calculated?

  Unemployed/Labor force * 100