Unemployment: Determinants

Q1. Which one of the following statements about cyclical unemployment is not correct?

(a) cyclical unemployment exists when there are more job vacancies than there are individuals looking for jobs

(b) cyclical unemployment exists when there is a GNP gap

(c) cyclical unemployment is not included in the natural rate of unemployment

(d) the duration of cyclical unemployment is affected by the level of aggregate 

 

Q2. The natural rate of unemployment is generally thought of as the

(a) ratio of the frictional unemployment rate to the cyclical unemployment rate.

(b) sum of structural unemployment and cyclical unemployment.

(c) sum of frictional unemployment and cyclical unemployment.

(d) sum of frictional unemployment and structural unemployment.

 

Q3. Which of the following will contribute to a rise in the normal rate of unemployment?

(a) a labour force that is growing faster than the growth of the general population

(b) an increase in the level of unemployment compensation and an easing of the requirements to receive the payments

(c) a change in the composition of the labour force

(d) all of the above contribute to a rise in the normal rate of unemployment