Lesson M2.3.2

M2.3.2 Causes and consequences of unemployment and full employment Quiz: OCR Economics, Unit 7

20 questions

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Lesson M2.3.2, Causes and consequences of unemployment and full employment: 20 multiple choice questions for the OCR Economics (H460), Unit 7: Economic policy objectives, written with Revision Ninja.

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The 20 questions

  1. How many weeks must an unemployed person have actively sought work under the ILO measure?

    • Two weeks
    • Four weeks
    • Eight weeks
    • Six weeks

  2. Which type of unemployment occurs when workers are moving between jobs?

    • Frictional
    • Seasonal
    • Cyclical
    • Structural

  3. Which measure of UK unemployment counts individuals receiving government unemployment benefits?

    • Workforce Census
    • Active Population Index
    • Claimant Count
    • Labour Force Survey

  4. If 2 million people are unemployed and 23 million are employed, what is the unemployment rate?

    • 2%
    • 8%
    • 10%
    • 8.7%

  5. What type of unemployment results from long-term decline in a specific industry?

    • Structural
    • Cyclical
    • Frictional
    • Real-wage

  6. A recession causes reduced consumer spending, leading to job losses. What type of unemployment is this?

    • Demand-deficient
    • Seasonal
    • Frictional
    • Structural

  7. Which unemployment type occurs when real wages are legally held above the market-clearing equilibrium?

    • Cyclical
    • Structural
    • Frictional
    • Real-wage

  8. What term describes a part-time worker who actively wants full-time employment?

    • Underemployed
    • Unemployed
    • Economically inactive
    • Frictional

  9. Which group is excluded from both the employment and unemployment figures in the labour market?

    • Economically inactive
    • Underemployed
    • Structural workers
    • Discouraged workers

  10. What economic concept explains why prolonged high unemployment reduces the long-run productive capacity of labour?

    • Deindustrialisation
    • Crowding out
    • Hysteresis
    • Stagflation

  11. What happens to a government budget balance when unemployment increases significantly?

    • Stays unchanged
    • Deficit shrinks
    • Deficit widens
    • Surplus widens

  12. Who defined full employment as an unemployment rate of three percent or less?

    • William Beveridge
    • Milton Friedman
    • Adam Smith
    • John Maynard Keynes

  13. Which macroeconomic drawback is most likely to occur as an economy approaches full employment?

    • Deflation
    • Demand-pull inflation
    • Falling wages
    • Structural unemployment

  14. What term describes the unemployment rate when the labour market is in equilibrium?

    • Seasonal baseline
    • Cyclical rate
    • Natural rate
    • Underemployment rate

  15. How does high employment typically affect a nation trade balance on the current account?

    • Improves trade balance
    • Has no effect
    • Worsens trade balance
    • Eliminates trade deficit

  16. What ratio compares income from unemployment benefits to potential wage earnings?

    • Dependency ratio
    • Participation rate
    • Activity rate
    • Replacement ratio

  17. What does the macroeconomics acronym NAIRU stand for?

    • Nominal average income rate
    • Non-accelerating inflation rate
    • National asset investment ratio
    • Net annual interest rate

  18. A qualified worker chooses not to accept available jobs at the prevailing market wage. What is this?

    • Voluntary unemployment
    • Cyclical unemployment
    • Involuntary unemployment
    • Structural unemployment

  19. What key economic concept is illustrated by output lost due to resources remaining idle during unemployment?

    • Moral hazard
    • Opportunity cost
    • Fiscal drag
    • Negative externality

  20. Which factor directly causes structural unemployment by preventing workers from switching between different industries?

    • Cyclical fluctuations
    • Geographical immobility
    • Occupational immobility
    • Wage rigidity

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