Name: __________________________________________ Date: _______________________ Score:

_______

Types of Unemployment

I. For each of the following situations, put the appropriate letter before the example.

F if it is Frictional Unemployment.

S if it is Structural Unemployment.

C if it is Cyclical Unemployment.

SE if it is Seasonal Unemployment.

NC if it is not counted in unemployment

____1. A computer programmer is laid off because of a recession.

____2. A construction worker has to find another job during the winter months from December to March.

____3. A magazine editor leaves his job in New York to look for a new job in San Francisco.

____4. An unemployed college graduate is looking for his first job.

____5. Advances in technology make the assembly-line worker’s job obsolete.

____6. Slumping sales lead to the cashier being laid off.

____7. A bank teller loses her job because she is replaced by an ATM machine.

____8. A high school student gets laid off from a lifeguard job at the end of the summer.

____9. Workers are laid off at a local manufacturing plant when the economy goes bad.

____10. A skilled glass blower becomes unemployed when a new machine does the job faster.

____ 11. A 15 year old cannot find a job after looking for 3 months.

____ 12. The football coach is fired after having a losing season.

_____13. Fred Flintstone was laid off from the Quarry because the nation is suffering from a recession.

_____14. Ronald McDonald, who just graduated from Clown School, is looking to find his first real job.

_____15. Scooby Doo is looking for a job during the winter since Kings Island is closed until Spring.

_____16. Paul Bunyan lost his job as a lumberjack because the timber company he works for decided to just
buy chainsaws.

_____17. The Tooth Fairy was fired because she just is not doing a good job.

_____18. Frosty the Snowman is expecting to be out of work shortly following the last big snow of the year.
_____19. The Easter Bunny found out that he was being let go, since Americans have decided to not eat eggs,
which are high in cholesterol.

_____19. Mickey Mouse voluntarily quit his job at Disney & has decided that he will seek a job as a truck
driver.

_____20. Sam I Am was laid off after orders for Green Eggs & Ham declined greatly following last years stock
market crash.

_____21. Peter Pan was fired from his job at the Peanut Butter factory because he is being replaced by
RoboCop (a highly efficient peanut butter machine.

_____22. Burgin works part-time serving bubble tea at a Karaoke club while he tries to find a full-time job as a
lumberjack

_____23.An individual who has been looking for work gives up the job search

_____24. A new college graduate is looking for their first job

_____25. A tax accountant is laid off as more people use software to do their taxes

_____26. A full time retail clerk has her hours reduced to part time by her manager

II. Calculate employment rates

The table below shows population and employment data for Downtown Abbey, a country with a total population
of 111 million people.

Status # of people
Children 0-15 years old 200,000

Employed 325,000

Unemployed 25,000

Discouraged adult workers 50,000

Full-time students over 15 100,000

Retired individuals 100,000

Stay-at-home parents and other non-working civilians over 16 100,000

Non-civilians (employed by armed forces) 60,000

Institutionalized individuals 40,000

What is Downtown Abbey's labor force participation rate (LFPR)? __________________

Solution:

III. Multiple Choice

1. Which of the following would most likely cause a nation's labor force participation rate (LFPR) to increase?

A. Employed workers lose their jobs and become unemployed

B. Paid workers leave their jobs to focus on full-time volunteer work instead of paid work

C. Fewer parents choose to stay at home with their children and instead take part-time jobs

D. There is an increase in the number of people leaving jobs and going to college full-time

E. The retirement age is lowered, which leads more people to retire earlier

2. Which of the following is the correct interpretation of an unemployment rate of 4%?

A. Four percent of the population is in the labor force.
B. 4% of the population is looking for work.
C. 4% of the labor force is out of work and looking for work.
D. 4% of the population is out of work and looking for work.
E. Four percent of the population has given up looking for work.

3. The nation of Jacksonia specializes in producing high-quality cream cheese and fire trucks for export to
other countries. Which of the following best describes something that would decrease the natural rate
of unemployment?
A. Job training programs are eliminated
B. Cream cheese factories begin to demand skills that are in short supply in Jacksonia
C. The economy of Jacksonia expands rapidly due to an increase in the demand for cream cheese
domestically and for fire trucks internationally
D. Labor unions in both industries become more powerful
E. Improvements in fire truck production mean that more fire truck workers are needed
4. The seasonally adjusted rate of unemployment in Hamsterville is 7%, percent. But the natural rate of
unemployment there is 5 %, percent. Which of the following describes why there is a difference
between the current rate of unemployment and the natural rate of unemployment?
A. There is 2%, percent Cyclical unemployment
B. There is 2%, percent Structural unemployment
C. There is 2%, percent frictional unemployment
D. There is 2% seasonal unemployment
E. We need more information to determine why there is a difference