Unemployment (Block 2)

Question 1

Labor force

Answer 1

The total number of people who are either employed or actively seeking employment.

Question 2

Labor force participation rate

Answer 2

The percentage of the working-age population that is in the labor force.

Question 3

Employment rate

Answer 3

The percentage of the working-age population that is employed.

Question 4

Unemployment rate

Answer 4

The percentage of the labor force that is unemployed and actively seeking employment.

Question 5

Natural rate of unemployment

Answer 5

The unemployment rate at which there is no cyclical unemployment, only frictional and structural unemployment.

Question 6

Cyclical unemployment

Answer 6

Unemployment caused by economic downturns or recessions.

Question 7

Frictional unemployment

Answer 7

Temporary unemployment experienced by individuals between jobs.

Question 8

Structural unemployment

Answer 8

Unemployment caused by a mismatch between the skills of workers and the requirements of available jobs.

Question 9

Efficiency wage hypothesis

Answer 9

The theory that paying higher wages can increase worker productivity and reduce turnover, leading to lower labor costs in the long run.

Question 10

Minimum Wage Laws

Answer 10

Government-mandated minimum wages set above the equilibrium wage rate to ensure workers receive a certain level of compensation.