Deck 8: Unemployment and Inflation

Question 1

The percentage of the labor force that is unemployed is the:

A)labor force participation rate.
B)employment ratio.
C)unemployment rate.
D)natural employment rate.

Answer 1

C

Question 2

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its unemployment rate is:

A)4%.
B)7)5%.
C)10%.
D)67.5%.

Answer 2

C

Question 3

The unemployment rate is the ratio of all of the people:

A)out of work to the total population.
B)out of work to those over age 16.
C)unemployed to those looking for work.
D)unemployed to those in the labor force.

Answer 3

D

Question 4

Which of the following statements is TRUE?

A)The number of people not working but who have looked for work in the past year are is equal to the number of unemployed people.
B)The labor force is the total number of people working plus those who are unemployed.
C)The unemployment rate is the number of people unemployed expressed as a percentage of the population.
D)The labor force is the same as the population.

Question 5

The rate of unemployment is found by dividing the:

A)number of people looking for work by the population.
B)number of people not working but looking for work by the number of people not working but looking for work plus the number of people employed.
C)labor force by the number of people looking for work.
D)unemployed and discouraged workers by the labor force.

Question 6

If a country has a working-age population of 200 million, 135 million people with jobs, and 15 million people unemployed and seeking employment, then its labor force is:

A)335 million.
B)200 million.
C)155 million.
D)150 million.

Question 7

The statistics and data on unemployment are gathered and reported:

A)daily.
B)weekly.
C)monthly.
D)yearly.

Question 8

The labor force is equal to the:

A)sum of employment and unemployment.
B)population minus the number of employed.
C)sum of the employed and the underemployed.
D)number of people working.

Question 9

To be officially unemployed, a person must:

A)not have a job and must have looked for work in the past four weeks.
B)under 55 years old.
C)working less than 30 hours per week.
D)working less than 20 hours per week.

Question 10

The unemployment rate is the:

A)percent of the labor force that is unemployed.
B)number of people unemployed.
C)the labor force minus the number of people unemployed.
D)average length of time someone is unemployed.

Question 11

A person who has no job but is looking for one is:

A)unemployed.
B)a discouraged worker.
C)part of the labor force.
D)unemployed and part of the labor force.

Question 12

To be classified as unemployed, a person must be:

A)not working.
B)not working and actively looking for a job in the past four weeks.
C)not working or working part-time but wishing to be working full-time.
D)not working and actively looking for a job in the past four weeks or discouraged and not actually looking for a job.

Question 13

You are a college student and not working or looking for work. You are:

A)unemployed.
B)in the labor force but not employed.
C)not part of the labor force.
D)counted in the labor force as underemployed.

Question 14

Employment is the total:

A)labor force.
B)population of working age.
C)number of people actively working, either full-time or part-time.
D)number of people not unemployed.

Question 15

A person without a job who is actively seeking and available for work is considered:

A)employed.
B)unemployed.
C)underemployed.
D)marginally attached.

Question 16

A person who is not working and is not looking for work is:

A)included in the unemployment rate.
B)underemployed.
C)a member of the labor force who is not working.
D)not counted in the unemployment statistics.

Question 17

If a country has a working-age population of 200 million, 120 million people with jobs, and 30 million people unemployed and seeking employment, then its unemployment rate is:

A)5%.
B)7)5%.
C)15%.
D)20%.

Question 18

The labor force is the total:

A)number of people employed.
B)population.
C)number of people in the population of working age.
D)number of people who are employed or unemployed.

Question 19

To be counted as unemployed, one must:

A)have had a job previously.
B)be out of work and be actively looking for a job during the past four weeks.
C)have had a job before and be actively looking for work.
D)be actively looking for a job and have at least a high-school diploma or its equivalent.

Question 20

The labor force is considered to be:

A)everyone who is employed.
B)everyone who is employed plus everyone who is unemployed.
C)the population of the nation.
D)those not frictionally unemployed plus all others employed.

Question 21

A survey reveals that on a small island initially 1,000 people have jobs, 250 people are not working but are looking for jobs, and 450 people are neither working nor looking for work. Suppose that 150 of the 450 people who weren't looking for work now begin looking for work. There are now 400 people looking for work and 1,000 people working. The unemployment rate:

A)falls to 20%.
B)rises to 28.6%.
C)rises to 50%.
D)Nothing happens to the unemployment rate, because these people weren't working before and they aren't working now.

Question 22

Use the following to answer questions 40-42:
(Table: Labor Force Data) Look at the table Labor Force Data. Suppose the labor force participation rate is 70%. The labor force is equal to:

A)1,200 million.
B)50 million.
C)105 million.
D)400 million.

Question 23

If there are 100 million people in the total population, a labor force of 50 million, and 47 million employed workers, the unemployment rate is:

A)3%.
B)6%.
C)8%.
D)10%.

Question 24

If the population of the United States is 260 million, the labor force is 130 million, and 120 million workers are employed, the rate of unemployment is:

A)7)7%.
B)8)3%.
C)50%.
D)92%.

Question 25

If the rate of unemployment is 10% and the labor force is 130 million, the number of unemployed workers is:

A)1)3 million.
B)13 million.
C)10 million.
D)8 million.

Question 26

If the labor force totals 100 million workers and 90 million are working, then the unemployment rate is:

A)1%.
B)5%.
C)10%.
D)90%.

Question 27

The unemployment rate equals the number _____ divided by the number _____ times 100.

A)unemployed; employed
B)unemployed; population
C)employed; labor force
D)unemployed; labor force

Question 28

Suppose there are 70 million people in the labor force, of whom 60 million are employed. The unemployment rate is:

A)7%.
B)10%.
C)14.28%.
D)4)2%.

Question 29

A survey reveals that on a small island initially 1,000 people have jobs, 200 people are unemployed but are looking for jobs, and 200 people are neither working nor looking for work. Suppose that 100 of the 200 people who weren't looking for work now begin looking for work and that half of the new entrants find a job. The unemployment rate:

A)rises to 19.2%.
B)rises to 21.4%.
C)rises to 28.6%.
D)Nothing happens to the unemployment rate.

Question 30

The Republic of Livonia has an adult population of 100 million; 60% of Livonia's population is employed, and 10% of the people are unemployed. The labor force participation rate in Livonia is:

A)70%.
B)60%.
C)7%.
D)10%.

Question 31

A survey reveals that on a small island 1,000 people have jobs, 250 people are unemployed and looking for jobs, and 450 people are neither working nor looking for work. The unemployment rate on the island is:

A)20%.
B)25%.
C)45%.
D)15.6%.

Question 32

If the labor force includes 100 million workers and 5 million people are unemployed but actively seeking work, then the unemployment rate is:

A)1%.
B)5%.
C)10%.
D)95%.

Question 33

In 2011, 10 million people did not have a job but were actively looking for employment, and 85 million people had either a full-time or a part-time job. The unemployment rate in 2011 was:

A)10%.
B)9)5%.
C)10.5%.
D)8)5%.

Question 34

A survey reveals that on a small island initially 40 people have jobs, 10 people are not working but looking for jobs, and 30 people are neither working nor looking for work. Suppose that 10 of the 30 people who weren't working or looking for work now begin looking for work. There are now 20 people without jobs but looking for work and 40 people working. The unemployment rate:

A)rises to 33.3%.
B)rises to 50%.
C)falls to 25%.
D)Nothing happens to the unemployment rate, because these people weren't working before and they aren't working now.

Question 35

A survey reveals that on a small island 1,000 people have jobs, 200 people don't have jobs but are looking for jobs, and 200 people are neither working nor looking for work. The unemployment rate on the island is:

A)12.5%.
B)16.7%.
C)20%.
D)30%.

Question 36

A survey reveals that on a small island 40 people have jobs, 10 people are not working but looking for jobs, and 30 people are neither working nor looking for work. The unemployment rate on the island is:

A)12.5%.
B)20%.
C)25%.
D)50%.

Question 37

Which of the following most accurately describes how to calculate the unemployment rate?

A)(Unemployed / population) × 100
B)(Unemployed / employed) × 100
C)(Unemployed / labor force) × 100
D)[(Unemployed - employed) / labor force] × 100

Question 38

If 99 million people are working and 1 million are unemployed but actively seeking work, then the unemployment rate is:

A)1%.
B)5%.
C)10%.
D)100%.

Question 39

A survey reveals that on a small island 100 people have jobs, 25 people are not working but are looking for jobs, and 45 people are neither working nor looking for work. The unemployment rate on the island is:

A)12.5%.
B)20%.
C)25%.
D)50%.

Question 40

A survey reveals that on a small island initially 100 people have jobs, 25 people don't have jobs but are looking for jobs, and 45 people are neither working nor looking for work. Suppose that 15 of the 45 people who weren't looking for work now begin looking for work. There are now 40 people looking for work and 100 people working. The unemployment rate:

A)falls to 20%.
B)rises to 28.6%.
C)rises to 50%.
D)Nothing happens to the unemployment rate, because these people weren't working before and they aren't working now.

Question 41

An increase in the number of discouraged workers in the economy tends to:

A)raise the official unemployment rate.
B)lower the official unemployment rate.
C)lower the number of people who are frictionally unemployed.
D)increase the number of people who are structurally unemployed.

Question 42

Which of the following situations is likely to lead to an increase in discouraged workers?

A)The economy is expanding.
B)The availability of jobs falls.
C)The economy is undergoing inflation.
D)The economy is undergoing deflation.

Question 43

If a country has a working-age population of 200 million, 135 million people with jobs, 10 million people who were looking for a job but have given up, and 5 million people unemployed and seeking employment, then the number of discouraged workers is:

A)25 million.
B)15 million.
C)10 million.
D)5 million.

Question 44

According to official statistics, discouraged workers are:

A)included in the employment statistics.
B)included in the labor force.
C)not included in the labor force.
D)treated just like the underemployed.

Question 45

The official unemployment rate reported by the government may tend to understate the amount of unemployment because it:

A)includes discouraged workers.
B)excludes discouraged workers.
C)includes people over 65 who aren't retired.
D)excludes teenagers.

Question 46

Suppose that roughly 8 million people in the United States were actively seeking jobs but had not found them this month, the same number as last month. Suppose that 2 million of the people who were unemployed last month gave up their search this month and stopped looking for work. What will happen to the official unemployment rate this month, all other things unchanged?

A)It will rise, because 2 million people are not in the labor force this month and are not counted as unemployed.
B)It will fall, because 2 million people are not in the labor force this month and are not counted as unemployed.
C)It will be unaffected, because the same number of people is unemployed.
D)The unemployment rate will decrease by 25%.

Question 47

Suppose that Allison has an accounting degree, but she lost her job two months ago when her company merged with another firm. Allison hasn't been able to find another accounting job, so she has taken a part-time job as a sales clerk at a clothing store. The Bureau of Labor Statistics classifies Allison as:

A)a marginally attached worker.
B)a discouraged worker.
C)underemployed.
D)unemployed.

Question 48

If a country has a working-age population of 200 million, 135 million people with jobs, 10 million people who were looking for a job but have given up, and 5 million people unemployed and seeking employment, then its labor force is:

A)150 million.
B)145 million.
C)140 million.
D)135 million.

Question 49

The Bureau of Labor Services calculates U-6. This measures the:

A)underuse of labor that includes discouraged workers, marginally attached workers, and underemployed workers.
B)use of labor based on various demographics.
C)labor force participation rate in a comprehensive way.
D)rate of overuse of labor when workers hold multiple jobs.

Question 50

Use the following to answer questions 43-44:
(Table: Labor Force Distribution) Look at the table Labor Force Distribution. The total population is:

A)486 million.
B)253 million.
C)278 million.
D)283 million.

Question 51

Jim has a part-time job and would prefer to have a full-time job but has been unable to find one. Jim is classified as:

A)a discouraged worker.
B)underemployed.
C)unemployed.
D)out of the labor force.

Question 52

The official unemployment rate ignores:

A)people with professional jobs.
B)people who work on commission.
C)discouraged workers.
D)people with professional jobs, people who work on commission, and discouraged workers.

Question 53

Use the following to answer questions 43-44:
(Table: Labor Force Distribution) Look at the table Labor Force Distribution. The unemployment rate is:

A)3)85%.
B)10%.
C)4)55%.
D)6)75%.

Question 54

The Bureau of Labor Statistics calls a person who is out of work, would like to work, but has given up looking for work:

A)unemployed.
B)employed.
C)a discouraged worker.
D)lazy.

Question 55

Use the following to answer questions 40-42:
(Table: Labor Force Data) Look at the table Labor Force Data. Suppose the labor force participation rate is 70%. The number of unemployed adults is:

A)8 million.
B)53 million.
C)103 million.
D)50 million.

Question 56

Use the following to answer questions 40-42:
(Table: Labor Force Data) Look at the table Labor Force Data. If the labor force participation rate is 70%, the unemployment rate is:

A)7)6%.
B)5%.
C)4%.
D)3%.

Question 57

Which federal agency calculates and reports the official unemployment rate?

A)Federal Reserve Bank
B)Treasury Department
C)Department of Health and Human Services
D)Bureau of Labor Statistics

Question 58

Economists claim that the unemployment rate can understate the true level of unemployment because none of the following groups is included EXCEPT:

A)discouraged workers.
B)marginally attached workers.
C)underemployed workers.
D)workers without jobs who have looked for work in the past four weeks.

Question 59

Donna was laid off at the beginning of 2011. She looked for a job for three months but could not find anything suitable. She then decided to volunteer for a soup kitchen and stopped looking for a job. Donna is considered to be:

A)unemployed.
B)underemployed.
C)a discouraged worker.
D)a part-time worker.

Question 60

Discouraged workers:

A)are getting paid too little.
B)do not like their job.
C)are working part-time but are looking for a full-time job.
D)have given up looking for a job.

Question 61

In general, expansions are characterized by:

A)increasing unemployment.
B)falling unemployment.
C)decreasing employment.
D)constant employment.

Question 62

Use the following to answer questions 76-79:
(Table: Employment Data) Look at the table Employment Data. The unemployment rate is:

A)6)25%.
B)6)45%.
C)9)09%.
D)9)37%.

Question 63

Use the following to answer questions 72-75:
Table: Unemployment and Employment Data
(Table: Unemployment and Employment Data) Look at the table Unemployment and Employment Data. If marginally attached workers are included in the labor force and in the unemployment rate, the unemployment rate in this economy is:

A)8)4%.
B)7)8%
C)5%.
D)3%.

Question 64

Use the following to answer questions 76-79:
(Table: Employment Data) Look at the table Employment Data. The labor force is:

A)33 million.
B)32 million.
C)31 million.
D)22 million.

Question 65

Use the following to answer questions 76-79:
(Table: Employment Data) Look at the table Employment Data. If marginally attached workers are included in the labor force and in the unemployment rate, the unemployment rate is:

A)39.4%.
B)30.3%.
C)9)1%.
D)6)25%.

Question 66

Which of the following statements is FALSE?

A)Unemployment always rises during recessions.
B)Unemployment always falls during expansions.
C)There is a strong negative relation between growth in real GDP and changes in unemployment.
D)In general, there is a trade-off between inflation and unemployment in the short run.

Question 67

Use the following to answer questions 80-84:
(Table: Population Data for Estill County) Look at the table Population Data for Estill County. How many people are in the labor force?

A)6,000
B)9,400
C)7,400
D)6,500

Question 68

Suppose that Allison has an accounting degree, but she lost her job two months ago when her company merged with another firm. Allison hasn't been able to find another accounting job, so she has taken a part-time job as a sales clerk at a clothing store. As a result the official unemployment rate will:

A)not change.
B)increase.
C)decrease.
D)increase temporarily, then fall back to its original level.

Question 69

Unemployment rates are usually highest for:

A)white teenagers.
B)African American teenagers.
C)male workers aged 25 to 54.
D)female workers aged 25 to 54.

Question 70

Periods of recession are likely to be marked by:

A)rising unemployment.
B)constant unemployment.
C)increasing employment.
D)constant employment.

Question 71

According to historical economic data for the United States from 1949 to 2014, the unemployment rate is most likely to rise:

A)whenever the economy grows at a rate below 3.25%.
B)only when there is no economic growth.
C)only when there is positive economic growth.
D)whenever the economy grows at a rate between 4% and 4.8%.

Question 72

Use the following to answer questions 72-75:
Table: Unemployment and Employment Data
(Table: Unemployment and Employment Data) Look at the table Unemployment and Employment Data. The unemployment rate for this economy is:

A)2)9%.
B)4)8%.
C)5%.
D)5)3%.

Question 73

People who are counted as unemployed by the Bureau of Labor Statistics are:

A)people without a job who are actively seeking a job.
B)discouraged workers.
C)workers who are underemployed.
D)people without a job who are actively seeking a job, discouraged workers, and workers who are underemployed.

Question 74

During a recession:

A)unemployment and the growth rate of real GDP both decrease.
B)unemployment decreases and the growth rate of real GDP increases.
C)unemployment increases and the growth rate of real GDP decreases.
D)there is no relation between unemployment and the growth rate of real GDP.

Question 75

Use the following to answer questions 76-79:
(Table: Employment Data) Look at the table Employment Data. If marginally attached workers are included in the labor force, the labor force is:

A)1 million.
B)11 million
C)32 million.
D)33 million.

Question 76

For most of U.S. modern economic history, when the unemployment rate is _____, real GDP is _____.

A)falling; rising
B)falling; falling
C)rising; unchanged
D)rising; rising

Question 77

Use the following to answer questions 72-75:
Table: Unemployment and Employment Data
(Table: Unemployment and Employment Data) Look at the table Unemployment and Employment Data. If marginally attached workers are included, the labor force in this economy is:

A)170 million.
B)103 million.
C)100 million.
D)98 million.

Question 78

If the growth rate of GDP is above its historical average, then there is a tendency for the unemployment rate to:

A)fall to zero.
B)rise.
C)fall.
D)stabilize.

Question 79

In general, for the U.S. economy, the relation between unemployment and economic growth is:

A)positive.
B)direct.
C)neutral.
D)negative.

Question 80

Use the following to answer questions 72-75:
Table: Unemployment and Employment Data
(Table: Unemployment and Employment Data) Look at the table Unemployment and Employment Data. The labor force in this economy is:

A)170 million.
B)140 million.
C)100 million.
D)98 million.