Deck 7: Unemployment

Question 1

If people who have been looking for work give up actively looking for work, ceteris paribus, the:

A)unemployment rate increases.
B)labour force participation rate increases.
C)unemployment rate decreases.
D)working-age population decreases.

Answer 1

unemployment rate decreases.

Question 2

How is the unemployment rate calculated?

A)By dividing the number of unemployed people by the number of working individuals, and multiplying by 100.
B)By dividing the number of unemployed people by the sum of the number of working people plus unemployed people, and multiplying by 100.
C)By dividing the number of unemployed people by the number in the working-age population, and multiplying by 100.
D)By dividing the number of unemployed people by the number of people in the labour force, and dividing by 100.

Answer 2

By dividing the number of unemployed people by the sum of the number of working people plus unemployed people, and multiplying by 100.

Question 3

Which of the following is true of 'discouraged workers'?

A)They are not considered part of the unemployed because they are not qualified to work.
B)They are considered part of the unemployed because they are not working.
C)They are considered part of the unemployed because they are still in the labour force.
D)They are not considered part of the unemployed because they are not actively seeking work.

Answer 3

They are not considered part of the unemployed because they are not actively seeking work.

Question 4

The ________ is the total number of people aged 15 years and over, and the ________ is the number of people either employed or unemployed.

A)labour force participation rate; labour force
B)working-age population; labour force
C)labour force; working-age population
D)working-age population; labour force participation rate

Question 5

How is the 'labour force participation rate' defined?

A)as the working-age population in the labour force
B)as the working-age population that is unemployed
C)as the labour force that is employed
D)as the working-age population that is employed

Question 6

Jill lost her job six months ago and she's been actively looking for a new job ever since. How would the Australian Bureau of Statistics classify Jill?

A)a discouraged worker
B)out of the labour force
C)unemployed
D)None of these options are correct.

Question 7

Which of the following would reduce the labour force participation rate, all else equal?

A)An increase in the number of people in the labour force.
B)An increase in the unemployment rate.
C)A decrease in the unemployment rate.
D)An increase in the working-age population.

Question 8

The 'labour force' is the:

A)number of people employed minus the number of people unemployed.
B)number of people employed plus the number of people unemployed.
C)ratio of the number of people employed to the number of people unemployed.
D)ratio of the number of people employed to the working-age population.

Question 9

If a part-time worker becomes a full-time worker, the:

A)official unemployment rate will fall.
B)official unemployment rate will not change.
C)economy will move closer toward full employment.
D)economy will move closer toward the natural rate of unemployment.

Question 10

How is a 'retired person' classified?

A)as unemployed
B)as under-employed
C)as not in the labour force
D)as part-time employed

Question 11

What is one of the questions asked when the Australian Bureau of Statistics conducts surveys to estimate the rate of unemployment?

A)Is the person currently available to start work?
B)Has the person looked for work during the past year?
C)Does the person have any skills?
D)Has the person worked for 10 hours or more in the past week?

Question 12

The 'unemployment rate' is the percentage of the:

A)labour force receiving unemployment benefits.
B)population that is unemployed.
C)working-age population that is unemployed.
D)labour force that is unemployed.

Question 13

The 'unemployment rate' is measured as the:

A)number of unemployed people divided by the number of employed people, multiplied by 100.
B)number of unemployed people divided by the labour force, multiplied by 100.
C)number of unemployed people divided by the total population, multiplied by 100.
D)labour force minus the number of unemployed, multiplied by 100.

Question 14

Refer to the following table.

All of the following mathematical calculations are correct. The unemployment rate is approximately:

A)(600/8 000)× 100 = 7.25%.
B)(600/7 500)× 100 = 8.00%.
C)(600/8 600)× 100 = 7.05%.
D)(600/4 000)× 100 = 15.00%.

Question 15

Around 1 800 people who were unemployed last month start new jobs this month. As a result of this increase in the number of employed workers, which of the following occurred (ceteris paribus)?

A)The labour force participation rate increased.
B)The unemployment rate decreased.
C)The labour force participation rate decreased.
D)The unemployment rate increased.

Question 16

For purposes of unemployment, how is a full-time student who is not working categorised?

A)not in the labour force
B)a discouraged worker
C)employed
D)unemployed

Question 17

How are 'discouraged workers' classified by the Australian Bureau of Statistics (ABS)?

A)not in the labour force
B)unemployed
C)part of the labour force
D)employed

Question 18

Which of the following will not lower the official measure of the unemployment rate?

A)Older workers taking early retirement.
B)People losing their full-time jobs and instead are given part-time jobs.
C)An increase in the number of 'discouraged workers'.
D)An economic boom.

Question 19

During an economic boom, many employees are asked to work more overtime hours each week. As a result of this:

A)the unemployment rate increases.
B)the unemployment rate decreases.
C)the labour force participation rate increases.
D)neither the unemployment rate nor the labour force participation rate changes.

Question 20

The 'labour force' is the sum of:

A)employed workers and unemployed workers.
B)employed workers and individuals not looking for work.
C)employed workers and the working-age population.
D)unemployed workers and the working-age population.

Question 21

If the number employed is 11 million, the number unemployed is 0.6 million, and the working-age population is 16 million, then the labour force participation rate is:

A)65.0%.
B)72.5%.
C)68.75%.
D)71.4%.

Question 22

In Australia in 2016, approximately how many people were in the labour force?

A)6)3 million.
B)12 million.
C)18.3 million.
D)19.6 million.

Question 23

Which of the following groups of educational attainment in Australia has the highest level of long-term unemployment?

A)Those whose highest education level is completion of Year 10 schooling.
B)Those whose highest education level is completion of Year 12 schooling.
C)Those whose highest education level is completion of a TAFE certificate.
D)Those whose highest education level is completion of a university degree.

Question 24

Refer to the following table.

All of the following mathematical calculations are correct. The unemployment rate is approximately:

A)(500/11 000)× 100 = 4.55%.
B)(500/22 000)× 100 = 2.27%.
C)(500/10 400)× 100 = 4.81%.
D)(500/11 500)× 100 = 4.34%.

Question 25

Which of following age groups is most likely to have the longest duration of continuous unemployment?

A)15-19 years
B)20-24 years
C)45-54 years
D)Over 55 years

Question 26

Which of the following causes the official measure of the unemployment rate to understate the true extent of joblessness?

A)Many full-time workers really want to be part-time workers.
B)People who collect unemployment benefits report themselves to be searching for a job.
C)Discouraged workers are not counted as unemployed.
D)Discouraged workers are counted as unemployed.

Question 27

Which of the following is true about the Australian labour force participation rate?

A)The labour force participation rate of adult men fell between 1978 and 2016.
B)The labour force participation rate of adult women fell between 1978 and 2016.
C)The labour force participation rate of adult men has increased from 1978 to 2016.
D)The labour force participation rate of adult women rose in the 1980s and fell again during the 1990s.

Question 28

In Australia between 1978 and 2016, the net number of:

A)part-time jobs and full-time jobs fell.
B)part-time jobs grew, while full-time jobs fell.
C)full-time jobs grew, while part-time jobs fell.
D)part-time jobs and full-time jobs grew.

Question 29

Except for recessions, the duration of unemployment for the typical person in Australia lasts:

A)less than six months.
B)over two years.
C)between six and nine months.
D)over one year.

Question 30

Over the past 30 years, the labour force participation rates of women have fallen as they leave the labour force to have children, while the labour force participation rates of men have risen.

Question 31

In Australia in 2016, the proportion of unemployed people who were 'long-term unemployed' as measured by the Australian Bureau of Statistics (ABS)was approximately:

A)5)7%.
B)7)6%.
C)22%.
D)24%.

Question 32

In Australia in early 2016, approximately how many people were not in the labour force but were of working age?

A)6)9 million.
B)12 million.
C)0)6 million.
D)11.4 million.

Question 33

If the number employed is 12 million, the working-age population is 16 million, and the number unemployed is 0.7 million, then the unemployment rate is:

A)5)51%.
B)5)17%.
C)3)75%.
D)12%.

Question 34

Which of the following is not an incentive for people to provide inaccurate employment information to the Australian Bureau of Statistics (ABS)?

A)People are embarrassed about being in low paid jobs.
B)Some people are employed in illegal activities.
C)People want to avoid paying taxes on earnings.
D)People think they might lose unemployment benefits if they declare that they have been working.

Question 35

The unemployment rate is calculated by adding up the number of people receiving unemployment benefit payments from the government.

Question 36

How is 'long-term unemployment' defined?

A)As those in the labour force who have been unemployed continuously for 6 months or more.
B)As those in the labour force who have been unemployed continuously for 2 years or more.
C)As those in the labour force who have been unemployed continuously for 12 months or more.
D)As people who are no longer in the workforce as they are discouraged workers.

Question 37

The official unemployment rate may understate the true rate of unemployment because of:

A)increases in worker productivity over time.
B)discouraged workers who no longer actively look for work.
C)workers who have more than one job.
D)changes in the wage rates which may increase unemployment.

Question 38

Which of the following describes actual trends in the Australian labour force participation rate?

A)The labour force participation rate of adult men has risen since the late 1970s.
B)The labour force participation rate of adult women has fallen since the late 1970s.
C)The labour force participation rate of adult men not in school, but too young to retire has risen since the late 1970s.
D)The labour force participation rate of adult women has risen since the late 1970s.

Question 39

In Australia between 2006 and 2016:

A)the fastest job growth was experienced in the full-time job category.
B)the fastest job growth was experienced in the part-time job category.
C)total net jobs growth fell.
D)the unemployment rate rose.

Question 40

The unemployment rate is the number of unemployed divided by the working-age population.

Question 41

The Australian Bureau of Statistics counts as 'employed', those people who work part-time but would prefer to work full-time. Suppose the people who had part-time jobs, but wanted full-time jobs, were counted as 'unemployed'. Explain how the unemployment rate and the labour force participation rate would change.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question 42

The labour force participation rates of men in Australia have gradually increased since 1978.

Question 43

For each of the following, indicate if the person would be classified as employed, unemployed, or not in the labour force: (i)a 65-year-old man who left his job and is now working as a volunteer for 10 hours a week; (ii)a university graduate who has not been able to find a position using her skills and is working as a wait-person for 30 hours a week; and (iii)a manufacturing worker who is out of a job and has given up searching for a job.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question 44

Explain how the rate of unemployment is measured and discuss the weaknesses of this method of measurement.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question 45

Explain why 'discouraged workers' are not measured as being 'unemployed'.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question 46

In 2016, the unemployment rate in Australia was highest for people in the age group:

A)15-19 years.
B)20-24 years.
C)55-59 years.
D)60-64 years.

Question 47

The Australian economy destroys hundreds of thousands of jobs every year, even when the economy is experiencing strong growth.

Question 48

Which of the following is an economic cost of rising unemployment rates?

A)loss of GDP
B)an inward shift in the production possibility frontier
C)a fall in the amount of unemployment benefits paid by the government
D)an increase in income levels, as people who lose their jobs move onto the unemployment benefits

Question 49

How has the labour force participation rate changed for men and women over the past 30 years in Australia?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question 50

Discuss the trends in labour force participation in Australia over the past 40 years.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question 51

Suppose 200 000 people are employed, 25 000 people are unemployed, and an additional 50 000 people are not in the labour force but are of working age. Calculate the labour force participation rate.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question 52

During periods of rising unemployment, the government receives less tax revenue from individuals and from businesses.

Question 53

Unemployment in Australia is:

A)significantly higher among older people than younger people.
B)one of the main causes of poverty.
C)not the cause of an increase in poverty as unemployed people receive unemployment benefits from the government.
D)equally distributed across all age groups in society.

Question 54

Suppose 200 000 people are employed, 25 000 people are unemployed, the working-age population is
250 000 and 50 000 people are out of the labour force. Calculate the unemployment rate.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question 55

How would the unemployment rate and the labour force participation rate change if discouraged workers were counted as 'unemployed' rather than as being in the 'not-in-the-labour force' category? Show this using the formula for both measurements.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question 56

The rate of unemployment in Australia is higher among 15-19-year-olds than 40-44 year-olds.

Question 57

For which of the following age groups was the unemployment rate in Australia the lowest in 2016?

A)15-19 years.
B)25-34 years.
C)35-44 years.
D)65 years and older

Question 58

Why are jobs continually being created and destroyed in the economy?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question 59

Which of the following is not a result of rising unemployment?

A)a loss of tax revenue to the government
B)an increase in poverty
C)an increase in wages for those who remain in employment as there are fewer people employed
D)lower incomes for people who become unemployed

Question 60

Outline the 'costs of unemployment'.
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question 61

Many economists argue that 'frictional unemployment':

A)no longer exists due to shortages of labour.
B)cannot and probably should not be eliminated.
C)should be eliminated.
D)prevents the economy from reaching its full-employment output level.

Question 62

A woman named Sheila who retired becomes bored and begins to look for a job. During the time she is searching for work, she would be classified as:

A)structurally unemployed.
B)cyclically unemployed.
C)frictionally unemployed.
D)not unemployed because she was not working before she started looking for a job.

Question 63

Why are policy makers concerned about rising unemployment rates?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question 64

Joe just told his boss that he thinks his boss is stupid. What type of unemployment is Joe likely to experience in the near future?

A)frictional
B)cyclical
C)permanent
D)structural

Question 65

Which of the following is an example of a worker experiencing 'cyclical unemployment'?

A)A worker that changes jobs to move closer her family.
B)An assembly line worker who loses his job because of automation.
C)A truck driver who was sacked because of a recession.
D)A worker who quits his job because he does not get along with his boss.

Question 66

Suzanne is a full-time student who is not looking for work. Suzanne is experiencing _____________ unemployment.

A)cyclical
B)structural
C)frictional
D)Suzanne is not experiencing unemployment of any kind because she is not currently part of the labour force.

Question 67

The unemployment resulting from workers laid off due to an economic contraction or a recession would be classified as:

A)frictional unemployment.
B)structural unemployment.
C)cyclical unemployment.
D)natural unemployment.

Question 68

Which groups of people in Australia are more likely to experience higher levels of unemployment?
_____________________________________________________________________________________________
_____________________________________________________________________________________________

Question 69

When would 'structural unemployment' increase?

A)When the economy enters a recession.
B)When the number of individuals who quit their job to find another increases.
C)When discouraged workers drop out of the work force.
D)When workers are replaced by machines and the workers do not have the skills to perform new jobs.

Question 70

'Frictional unemployment' would increase when:

A)there is a fall in aggregate demand.
B)workers are replaced by machines and the workers do not have the skills necessary to perform new jobs.
C)discouraged workers leave the labour force.
D)the number of individuals who quit their job to find another job increases.

Question 71

Unemployment arising from a persistent mismatch between the skills and characteristics of workers and the requirements of jobs is called:

A)frictional unemployment.
B)structural unemployment.
C)cyclical unemployment.
D)seasonal unemployment.

Question 72

People who lost their jobs as hand-drawn animators because of the popularity of computer-generated 3D animation are examples of people who are experiencing:

A)frictional unemployment.
B)structural unemployment.
C)cyclical unemployment.
D)seasonal unemployment.

Question 73

The demand for new motor vehicles falls when the economy enters a downturn and as a result, motor vehicle manufacturers sack some workers. This would be an example of:

A)structural unemployment.
B)frictional unemployment.
C)natural unemployment.
D)cyclical unemployment.

Question 74

The demand for new motor vehicles falls due to high oil prices and a move by people toward a greater use of public transport. As a result, motor vehicle manufacturers sack some workers. This would be an example of:

A)structural unemployment.
B)cyclical unemployment.
C)natural unemployment.
D)frictional unemployment.

Question 75

An example of a 'seasonally unemployed' worker would be a:

A)software engineer who loses his job because of declining demand for the software he writes.
B)child care provider who quits her job to go back to university.
C)General Motors Holden employee who loses her job because the company is downsizing its workforce.
D)worker employed at a beachside resort who loses his job in winter.

Question 76

A woman who quit her job to search for a job that better utilises her skills represents an example of:

A)structural unemployment.
B)frictional unemployment.
C)cyclical unemployment.
D)seasonal unemployment.

Question 77

Which of the following is an example of a worker experiencing 'frictional unemployment'?

A)A worker who quits his job at the post office to find more interesting work.
B)A computer programmer who loses her job because it is outsourced to India.
C)An employee who loses his job because the economy is suffering a recession.
D)An airline pilot who loses her job because of lack of demand for air travel.

Question 78

How is 'cyclical unemployment' defined?

A)Unemployment due to an economic contraction or recession.
B)Unemployment due to changes in the structure of the economy.
C)Unemployment that occurs when people are searching for their first job.
D)Unemployment that occurs when people become discouraged and stop looking for work.

Question 79

'Frictional unemployment' can be defined as unemployed that:

A)arises due to changes in technology in the economy.
B)occurs as the result of a recession.
C)occurs when people are re-entering the labour force.
D)occurs when people have not had a job for 12 months or more.

Question 80

What do economists call the short-term unemployment arising from the process of matching workers with jobs?

A)cyclical unemployment
B)structural unemployment
C)frictional unemployment
D)seasonal unemployment