AP Macroeconomics : How to find unemployment

Study concepts, example questions & explanations for AP Macroeconomics

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Example Questions

Example Question #2 : Employment

Of structural, frictional, and cyclical unemployments, what type of unemployment is seen as the most harmful to a society?

Possible Answers:

None of these answers

Structural

Frictional

Cyclical

Correct answer:

Cyclical

Explanation:

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 #1 : How To Find Unemployment

Which of the following is NOT included when calculating the unemployment rate?

Possible Answers:

those who are looking for a new job 

those who are unemployed because their previous employer went out of business

those who were fired from their previous jobs

those who are underemployed

those who are unemployed but are no longer actively looking for a job

Correct answer:

those who are unemployed but are no longer actively looking for a job

Explanation:

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 #4 : Employment

Which of the following is the best example of frictional unemployment?

Possible Answers:

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.

An assembly line worker at a factory loses his job because the plant that he works at purchases a new machine to replace him.

Correct answer:

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.

Explanation:

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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