Best Economics Unemployment Test - 53+ MCQs: Economics - Unemployment test: Evaluate Your Knowledge with Questions and Answers

1. Which factor can lead to an increase in cyclical unemployment?

A decrease in government spending

A rise in business confidence

An increase in consumer confidence

A decline in exports

2. What effect does a minimum wage above the equilibrium wage have on unemployment?

It reduces unemployment by increasing aggregate demand

It reduces unemployment by improving worker productivity

It increases unemployment among low-skilled workers

It has no impact on unemployment

3. What is the main drawback of using unemployment insurance?

It discourages job searching and prolongs unemployment spells

It increases the government's budget deficit

It leads to inflationary pressures in the economy

It reduces the overall labor force participation rate

4. What is the labor force participation rate?

The proportion of the working-age population that is employed

The proportion of the working-age population that is unemployed

The proportion of the working-age population that is not in the labor force

The proportion of the working-age population that is actively seeking employment

5. What is the Okun's Law?

A law stating that for every 1% increase in unemployment, a country's GDP will be roughly an additional 2% lower than its potential GDP

A law stating that for every 1% increase in unemployment, a country's GDP will increase by 2%

A law stating that unemployment has no impact on a country's GDP

A law stating that unemployment and GDP move in opposite directions

6. Which of the following is a consequence of high unemployment?

Increased government revenue

Lower government spending on unemployment benefits

Decreased consumer spending

Increased investment in capital goods

7. What is the natural rate of unemployment?

The rate of unemployment at which inflation remains stable

The rate of unemployment during economic booms

The rate of unemployment during economic recessions

The rate of unemployment when all individuals are employed

8. What is the 'Laffer Curve' related to unemployment?

A graphical representation of the relationship between tax rates and government revenue

A model explaining the cyclical nature of unemployment

A theory describing the impact of globalization on labor markets

A measure of labor productivity growth over time

9. What does the 'Phillips curve' depict?

A graphical representation showing the inverse relationship between inflation and unemployment

A model explaining the cyclical nature of economic fluctuations

A measure of income inequality within a society

A theory describing the impact of technological advancements on labor markets

10. What does the U-6 unemployment rate measure?

The official unemployment rate reported by the government

The rate of unemployment that includes discouraged workers and those working part-time for economic reasons

The rate of unemployment that includes only those actively seeking work

The rate of unemployment that includes only long-term unemployed individuals

Economics - Unemployment MCQ Test 5