Future Business Leaders of America (FBLA) Personal Finance Practice Test

When unemployment is low, what is the effect on job seekers?

1. More people are looking for work

2. Fewer people are looking for work

3. Jobs become scarce

4. Wages tend to decrease

The correct answer is: Fewer people are looking for work

When unemployment is low, the effect on job seekers is that there are generally fewer people looking for work. In a low unemployment situation, many individuals who wish to work are already employed, leading to a smaller pool of job seekers. The labor market is typically tight, which means that employers have to compete for a limited number of candidates. As a result, individuals who are unemployed have a greater chance of finding work because there are more job opportunities available. This scenario creates less urgency for job seekers to continually search for employment, as many are already satisfied in their current roles or in transitional positions. In contrast, during high unemployment, there are more individuals actively seeking work, which can lead to more competition for available positions. Additionally, the job market may be less favorable, with employers having a larger selection of candidates to choose from, thereby making it more difficult for job seekers to secure employment.