Question

1. Which of the following would not be used to reduce structural unemployment?

1. retraining assistance
2. relocation assistance
3. policies to expand GDP
4. policies to expand education

1. Full employment means:

a. no cyclical unemployment.

b. no frictional unemployment.

c. no structural unemployment.

d. all of the above.

1. What is the effect of a minimum wage in a low skill labor market?

1. a higher wage.
2. a higher quantity of labor supplied.
3. a lower quantity of labor demanded.
4. all of the above.

True-and False Questions

1. The problem of unemployment for the macro economy is the reduction in output that results.

2. Frictional unemployment is assumed to be fairly normal and temporary.

3. Because of its short duration, structural unemployment is assumed not to be very serious.

4. Cyclical unemployment results from a drop in economy activity in our economy as a whole.

5. Full employment means there is no unemployment.

6. Since 1964, the U.S. labor force participation rate has decreased.

7. According to the official definition of unemployment, unemployed people include those who have given up seeking employment.

Answer 1

1. Policies to expand GDP would not be used to reduce structural unemployment. Hence, option(C) is correct.

2. Full employment means no cyclical unemployment. Hence, option(A) is correct.

3. Higher wage , higher quantity of labor supplied and lower quantity of labor supplied is the effect of a minimum wage in a low skill labor market. Hence, option(D) is correct.

1. TRUE The problem of unemployment for the macro economy is the reduction in output that results.

2. TRUE  Frictional unemployment is assumed to be fairly normal and temporary.

3. FALSE because this is not the case thatits short duration, structural unemployment is assumed not to be very serious.

4. TRUE Cyclical unemployment results from a drop in economy activity in our economy as a whole.

5. FALSE because full employment means a situation when there is no cyclical unemployment , it is not the case of no unemployment ,there is always some frictional unemployment present in the economy.

6. FALSE because Since 1964, the U.S. labor force participation rate has not decreased.

7. FALSE because According to the official definition of unemployment, unemployed people include those are actively searching for work and not given up.