Lesson 4.2.3.2
4.2.3.2 Employment and unemployment Quiz: AQA Economics, Unit 2
20 questions
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Lesson 4.2.3.2, Employment and unemployment: 20 multiple choice questions for the AQA Economics (7136), Unit 2: The national and international economy, written with Revision Ninja.
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The 20 questions
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Which measure of UK unemployment counts people claiming unemployment-related benefits?
- The Labour Force Survey
- The economic inactivity rate
- The claimant count
- The employment rate
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Which statement describes the Labour Force Survey (LFS) measure of unemployment?
- It counts only people who have been out of work for more than a year
- It is a household survey counting people without work who are available and actively seeking work
- It counts all people who are not employed, including students and retired people
- It counts only people receiving unemployment benefit payments, which is the same group that the claimant count measures each month
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What is voluntary unemployment?
- Unemployment that arises because workers are seasonally absent
- Unemployment caused by a recession that affects all workers
- Unemployment where a person is unwilling to accept the current wage or conditions of available jobs
- Unemployment caused by a government decision to close an industry, which leaves workers unable to find any other job at all
-
What is frictional unemployment?
- Long-term unemployment caused by the decline of traditional industries, which leaves workers without any realistic prospect of a new job
- Short-term unemployment arising while people move between jobs or enter the labour market
- Unemployment that exists only during the winter months
- Unemployment caused by a fall in total demand for goods
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What is structural unemployment?
- Unemployment that rises and falls with the level of total demand
- Unemployment caused by a mismatch between the skills of workers and the jobs available, or by the decline of industries
- Unemployment that exists only while people move between jobs
- Unemployment that occurs for a few months each year due to seasonal demand, which is caused by changes in the level of total spending
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What is seasonal unemployment?
- Unemployment that results from a permanent fall in the labour force, as people leave work to care for family or retire early
- Unemployment that arises because demand for labour changes at certain times of the year
- Unemployment that is caused by a long recession in the economy
- Unemployment that arises from a change in the exchange rate
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What is the natural rate of unemployment?
- The rate of unemployment that occurs when the economy is at its cyclical peak, when output is above potential and wages are rising fastest
- The rate of unemployment that is always equal to zero in the long run
- The rate of unemployment consistent with stable inflation, including frictional and structural unemployment
- The rate of unemployment measured by the claimant count only
-
A country has a labour force of 30 million, of whom 28 million are employed. What is the unemployment rate?
- 93.3 per cent
- 7.1 per cent
- 2 per cent
- 6.7 per cent
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Real wage unemployment exists when:
- Real wages rise faster than productivity, so firms hire more workers, which lowers the number of people looking for jobs in the economy
- The price level falls, so workers accept lower money wages
- The real wage is set above the market-clearing level, so labour supply exceeds labour demand
- Workers choose to leave the labour force to study
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Cyclical unemployment is rising as the output gap widens. Which policy is most appropriate to tackle this?
- Supply-side policy that reduces trade union power
- Policies that improve information about job vacancies, which would reduce the number of workers who are searching for jobs in a recession
- Policies that increase the minimum wage in all sectors
- Expansionary demand-side policy to raise aggregate demand
-
A factory automates its production, so many workers' skills are no longer needed and they struggle to find new jobs. What type of unemployment is this?
- Structural unemployment
- Seasonal unemployment
- Frictional unemployment
- Voluntary unemployment
-
The claimant count falls because of changes to benefit eligibility, while the LFS measure does not fall. What best explains this difference?
- The claimant count includes everyone in the labour force, so it cannot change while the LFS measure is changing each quarter
- The LFS is calculated using benefit payments, so it must rise when the claimant count falls
- The two measures count different groups, so changes to benefit rules affect only the claimant count
- Both measures are always identical, so the difference must be a data error
-
Which supply-side cause of unemployment affects the position of the long-run aggregate supply curve?
- A skills mismatch between workers and available jobs
- A fall in consumer spending during a recession
- A temporary fall in demand for holiday accommodation
- A rise in the number of people between jobs
-
The labour force is 33 million and there are 1.5 million unemployed. What is the unemployment rate?
- 1.5 per cent
- 4.5 per cent
- 3.3 per cent
- 5.0 per cent
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Which is a consequence of unemployment for individuals?
- Lower tax payments, which always improve household budgets
- Better skills and career progression during long periods out of work
- Loss of income, reduced self-esteem and loss of skills over time
- Higher pay and greater job security
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Why does the appropriate policy to reduce unemployment depend on its cause?
- Only the claimant count affects policy, so causes do not matter
- Different causes such as cyclical, structural and frictional need different remedies, such as demand boosts or training
- Unemployment is always reduced by cutting taxes, whatever its cause
- All types of unemployment respond identically to a rise in government spending, so one policy tool is enough in every case
-
Why might the natural rate of unemployment fall over time?
- A rise in money wages always reduces the natural rate
- A rise in interest rates reduces the natural rate immediately
- Supply-side policies such as training and labour market reform reduce structural and frictional unemployment
- A fall in productivity makes it easier for workers to find jobs, because firms need more staff to keep output at the same level
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Why might a negative output gap that lasts a long time lead to permanent losses in the economy's supply side?
- Unemployment has no effect on aggregate supply in any period
- Long-term unemployment raises the productive potential of workers who stay in jobs, since employers reward those who keep working
- Long-term unemployment only affects the price level and never affects output
- Long-term unemployment causes skills to atrophy, which reduces productive capacity and can shift LRAS left
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Evaluate whether a fall in real wages could reduce unemployment in every case.
- Yes, because lower real wages always raise aggregate demand by more
- No, because real wages have no effect on the labour market at all
- Yes, because lower real wages always raise the number of jobs in every sector and so remove unemployment across all regions
- Not always, because the cause may be a lack of demand or structural change rather than wages being too high
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Which of the following is the best evaluation of using the claimant count as the main measure of unemployment?
- It measures economic activity rather than unemployment
- It counts all people without a job, including those who are not seeking work and those who have never been available to start work
- It is always more accurate than the LFS, because it uses official data
- It may understate unemployment, since some unemployed people do not claim benefits and benefit rules can change the count
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