Podcast
Questions and Answers
Frictional unemployment exists because of all of the following except:
Frictional unemployment exists because of all of the following except:
In general, expansions are characterized by:
In general, expansions are characterized by:
falling unemployment
A worker classified as frictionally unemployed is one who is:
A worker classified as frictionally unemployed is one who is:
voluntarily looking for work, somewhere a job exists that demands his or her skills.
Eliminating the business cycle would eliminate ______ unemployment.
Eliminating the business cycle would eliminate ______ unemployment.
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What type of unemployment did workers in the slide rule industry experience during the 1970s due to the popularity of handheld calculators?
What type of unemployment did workers in the slide rule industry experience during the 1970s due to the popularity of handheld calculators?
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The goal of unemployment policy is to eliminate frictional unemployment.
The goal of unemployment policy is to eliminate frictional unemployment.
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Sam is experiencing unemployment due to the steel plant closure. What type of unemployment is this?
Sam is experiencing unemployment due to the steel plant closure. What type of unemployment is this?
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If the actual unemployment rate is 7% and the cyclical unemployment rate is 2%, what is the natural rate of unemployment?
If the actual unemployment rate is 7% and the cyclical unemployment rate is 2%, what is the natural rate of unemployment?
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Full employment, as defined by economists, is:
Full employment, as defined by economists, is:
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Unemployment rates differ little by education, age, or ethnic group.
Unemployment rates differ little by education, age, or ethnic group.
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Firms pay efficiency wages because:
Firms pay efficiency wages because:
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Young females have a higher unemployment rate than young males.
Young females have a higher unemployment rate than young males.
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Efficiency wages are wages that are:
Efficiency wages are wages that are:
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The natural rate of employment is achieved when:
The natural rate of employment is achieved when:
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The natural rate of unemployment is:
The natural rate of unemployment is:
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An example of cyclical unemployment is a(n):
An example of cyclical unemployment is a(n):
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The type of unemployment that is on the rise during a recession is known as:
The type of unemployment that is on the rise during a recession is known as:
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Study Notes
Types of Unemployment
- Frictional unemployment occurs when individuals are temporarily unemployed while transitioning to new jobs, but not due to a lack of skills.
- Structural unemployment arises when there is a mismatch between workers' skills and job opportunities, often due to technological changes or industry shifts.
- Cyclical unemployment is linked to the economic cycle, typically increasing during recessions and decreasing during expansions.
Characteristics of Economic Expansions
- Expansions are typically marked by falling unemployment rates as businesses grow and hire more workers.
Definitions and Key Concepts
- Full employment is defined as the natural rate of unemployment, which includes frictional and structural unemployment but excludes cyclical unemployment.
- The natural rate of unemployment is about 5%, calculated as the actual unemployment rate minus cyclical unemployment.
- Efficiency wages are set above market equilibrium to enhance worker productivity and reduce turnover rates.
Unemployment Trends and Demographics
- Education level, age, and ethnicity significantly impact unemployment rates, contradicting the notion that these factors have little effect.
- Young females historically have a lower unemployment rate compared to young males, contrary to some beliefs.
Unemployment Policies
- The aim of unemployment policies is not to eliminate frictional unemployment, as it is a normal part of a dynamic job market.
- Firms employ strategies like paying efficiency wages to retain top talent and mitigate worker loss.
Recession Impact
- During the 2008 recession, cyclical unemployment surged as businesses laid off workers, particularly in sectors like manufacturing (e.g., automobile industry).
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Description
Test your knowledge with this self quiz on micro-economics concepts. This quiz covers key terms such as frictional unemployment and economic expansions. Perfect for students looking to reinforce their understanding of fundamental economic principles.
