AP Macroeconomics : Employment
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Example Questions
Example Question #1 : How To Find Effects On Employment
Which of the following is an example of an automatic stabilizer?
Unemployment insurance
Expansionary monetary policy by a Central Bank
Deficit spending by governments
Corporate layoffs
Unemployment insurance
Unemployment insurance is an example of an automatic stabilizer. An automatic stabilizer is something that stabilizes real economic output in the event of recession. Because unemployment insurance gives workers that have been laid off some money, it is considered an automatic stabilizer, because it lessens the damage that laying these workers off will have on the consumption component of GDP.
Example Question #1 : How To Find Unemployment
Of structural, frictional, and cyclical unemployments, what type of unemployment is seen as the most harmful to a society?
Structural
Cyclical
None of these answers
Frictional
Cyclical
Some positive amount of frictional unemployment is seen as positive in society as it allows workers to be matched to the most appropriate job for their skills. Some structural unemployment is unavoidable due to technological change, but the development in the economy that causes it is likely to be a net positive.
Cyclical unemployment provides no benefit to society and the increase in unemployment and decrease in output will continue after a recession is over.
Example Question #2 : Unemployment
Which of the following is NOT included when calculating the unemployment rate?
those who are unemployed but are no longer actively looking for a job
those who are underemployed
those who are unemployed because their previous employer went out of business
those who are looking for a new job
those who were fired from their previous jobs
those who are unemployed but are no longer actively looking for a job
The unemployment rate does not measure the percentage of people who do not have a full time job; it instead measures the percentage of people in the workforce who are not employed. The workforce includes all current workers, people on unemployment assistance, and those actively looking for a job. Not counted in the measure of the workforce are people not looking for a job, including people who have chosen not to or are unable to seek full time work.
Example Question #2 : How To Find Unemployment
Which of the following is the best example of frictional unemployment?
An assembly line worker at a factory loses his job because the plant that he works at purchases a new machine to replace him.
A major corporation announces that it is laying off 250 employees due to an economic recession which has caused weakening demand for their products.
A retail employee who was hired by a shopkeeper during the holiday season is let go once the holiday season is over.
A recent college graduate quits her job at a local coffee shop upon graduation. She is planning on applying for a salaried position with local banks in the area.
A recent college graduate quits her job at a local coffee shop upon graduation. She is planning on applying for a salaried position with local banks in the area.
Frictional unemployment is the unemployment that results from employees quitting their jobs, voluntarily moving from one job to another, or being fired for reasons that do not have to do with the overall macroeconomy.
As a result, the best answer here is the recent college graduate leaving her job to pursue a salaried position, because she is moving from one job to another.
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