Unemployment Flashcards
7 cards from real AP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Unemployment flashcards as text
Seasonal unemployment is best described as unemployment that results from:
Answer: Regular and predictable fluctuations in labor demand across seasons
Seasonal unemployment arises from predictable, recurring changes in labor demand tied to seasons or holidays.
According to most economists, which type of unemployment is included in the natural rate?
Answer: Frictional and structural unemployment
The natural rate of unemployment includes frictional and structural unemployment but NOT cyclical unemployment.
If Congress passes a law significantly raising the minimum wage above the equilibrium wage, the likely result is:
Answer: An increase in unemployment due to a labor surplus
A binding minimum wage above equilibrium creates a surplus of labor (quantity supplied exceeds quantity demanded), raising unemployment.
Which of the following would cause the natural rate of unemployment to DECREASE?
Answer: Improved job-matching technology reducing search time
Better job-matching technology reduces frictional unemployment, lowering the natural rate.
Underemployment differs from unemployment in that underemployed workers are:
Answer: Working part-time involuntarily or in jobs below their skill level
Underemployed workers are employed but in positions that do not fully utilize their skills or desired hours.
During a severe recession, which type of unemployment rises MOST sharply?
Answer: Cyclical
Cyclical unemployment rises sharply during recessions as falling aggregate demand reduces the overall demand for labor.
An expansionary fiscal policy is most effective at reducing which type of unemployment?
Answer: Cyclical unemployment
Expansionary fiscal policy boosts aggregate demand, which directly addresses cyclical unemployment caused by insufficient demand.