Question 1

During a recession, people drop out of the labor force because they are unable to find a job. All else the same, this

Accepted Answer

When people drop out of the labor force because they cannot find a job, they are no longer counted as unemployed since the U-3 unemployment rate only considers those actively seeking employment. This decreases the U-3 unemployment rate because the numerator (number of unemployed) decreases while the denominator (labor force) also decreases, leading to a lower unemployment rate.

Question 2

Suppose there are 100 million in the labor force, and 6 million unemployed people. During the next month, 200,000 people lose their jobs and 300,000 find jobs. The new total of employed persons is ________ and the new unemployment rate is ________.

Accepted Answer

The answer of Suppose there are 100 million in the...

Question 3

Suppose there are currently 100 people unemployed, 1,500 people employed, 1,600 people in the labor force, and 2,000 people in the working age population. The unemployment rate equals 100 times

Accepted Answer

The unemployment rate is calculated as the number of unemployed people divided by the labor force, then multiplied by 100 to convert it to a percentage. Here, it's (100 unemployed / 1,600 labor force) * 100 = 100/1,600.

Question 4

Which labor market statistic tends rise during recessions and fall during expansions?

Accepted Answer

The unemployment rate typically rises during recessions as businesses lay off workers due to decreased demand for goods and services, and falls during expansions as the economy improves and businesses hire more workers.

Question 5

The population of Tiny Town is 100 people and the labor force is made up of 75 people. If 5 of these people are unemployed, the unemployment rate is

Accepted Answer

The unemployment rate is calculated as the number of unemployed individuals divided by the labor force, then multiplied by 100 to convert it to a percentage. In this case, it's 5 (unemployed) / 75 (labor force) × 100 = 6.67%.

Question 6

In an economy, 23 million people are employed and 2 million are unemployed, but 5 million part-time workers would prefer full-time work. What is the unemployment rate?

Accepted Answer

The answer of In an economy, 23 million people are...

Question 7

Based on the following data for the country of Tiny Town, the unemployment rate equals Population = 100
Labor force = 80
Number of employed persons = 70
Number of discouraged workers = 5

Accepted Answer

The unemployment rate is calculated as the number of unemployed persons divided by the labor force, then multiplied by 100. In Tiny Town, there are 80 people in the labor force and 70 are employed, so 10 are unemployed. Therefore, the unemployment rate is (10/80) × 100.

Question 8

Between September 2013 and September 2014 the number of discouraged workers decreased from 852,000 to 698,000. Assuming the change resulted from discouraged workers starting to make specific efforts to find a job again, this change creates

Accepted Answer

When discouraged workers start looking for work again, they are counted as unemployed, which increases the U-3 unemployment rate because it measures the number of unemployed people as a percentage of the labor force, and these individuals re-enter the labor force when they begin searching for jobs.

Question 9

Suppose the population is 220 million people, the labor force is 150 million people, the number of people employed is 130 million and the working-age population is 175 million people. What is the unemployment rate?

Accepted Answer

The unemployment rate is calculated as the number of unemployed people divided by the labor force, then multiplied by 100 to convert it to a percentage. The number of unemployed people is the labor force minus the number of people employed, which is 150 million - 130 million = 20 million. Therefore, the unemployment rate is (20 million / 150 million) * 100 = 13.3 percent.

Question 10

The unemployment rate measures the percentage of

Accepted Answer

The unemployment rate specifically measures the percentage of people in the labor force (those actively seeking employment and available to work) who cannot find a job.

Question 11

Between September 2013 and September 2014 the number of economic part-time workers decreased from 7.9 million to 7.1 million. Assuming the change resulted from economic part-time workers transitioning to full-time jobs, this change created

Accepted Answer

Economic part-time workers are already counted as employed in the U-3 unemployment rate, so transitioning to full-time does not change the U-3 rate.

Question 12

Which of the following decreases the official U-3 unemployment rate?

Accepted Answer

The U-3 unemployment rate measures the number of unemployed individuals who are actively seeking employment as a percentage of the labor force. When workers leave the labor force, they are no longer counted as part of the labor force or as unemployed, which decreases the unemployment rate. Choices B and C would either increase the labor force without immediately affecting employment numbers or increase the number of unemployed, thus not decreasing the U-3 rate.

Question 13

If the number of people unemployed is 100, the number of people employed is 1,000, and the working-age population is 1,400, then the unemployment rate is

Accepted Answer

The answer of If the number of people unemployed is...

Question 14

Suppose that the total labor force is 100 individuals with 10 unemployed. The unemployment rate is ________. Now assume that 10 people drop out of the labor force and that 10 remain unemployed. The new unemployment rate is ________.

Accepted Answer

Initially, the unemployment rate is calculated as (10 unemployed / 100 total labor force) * 100 = 10%. After 10 people drop out, the new labor force is 90 individuals, with 10 still unemployed, making the new unemployment rate (10 unemployed / 90 total labor force) * 100 = 11.11%, which rounds to 11 percent.

Question 15

In September 2014, the official U-3 unemployment rate dropped from 6.1 percent to 5.9 percent. This change could have been caused by

Accepted Answer

The U-3 unemployment rate measures the percentage of the labor force that is unemployed and actively seeking employment. If unemployed workers stop looking for a job, they are no longer counted as part of the labor force, which can cause the unemployment rate to drop, as seen in the scenario from 6.1 percent to 5.9 percent.

Question 16

Suppose the population of Tiny Town is 100 people and the working age population is 70. If 10 of these people are unemployed, the unemployment rate in Tiny Town is

Accepted Answer

The answer of Suppose the population of Tiny Town is...

Question 17

To calculate the unemployment rate, which of the following are necessary pieces of information?
I. the number of unemployed persons
II. the population
III. the number of people in the labor force
IV. the working age population

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed persons (I) by the number of people in the labor force (III) and then multiplying by 100. The total population and the working age population are not directly used in this calculation.

Question 18

Suppose the working-age population is 220 million, the labor force is 150 million, and the unemployment rate is 10 percent. The number of unemployed people is

Accepted Answer

The number of unemployed people is calculated as 10% of the labor force, which is 10% of 150 million = 15 million.

Question 19

Suppose initially that the working-age population is 220 million, the labor force is 150 million, and the official U-3 unemployment rate is 10 percent. 5 million new jobs are created and filled by 5 million people who had previously been discouraged workers. What is the new U-3 unemployment rate?

Accepted Answer

The answer of Suppose initially that the working-age population is...

Question 20

In the United States in 1996, the population was 265.5 million and the working age population was 200.6 million. There were 133.9 million people in the labor force and 126.7 of them were employed. The unemployment rate equaled

Accepted Answer

The unemployment rate is calculated as the number of unemployed people divided by the labor force, then multiplied by 100 to get a percentage. In this case, the number of unemployed people is the difference between the labor force (133.9 million) and the employed (126.7 million), which is 7.2 million. Therefore, the unemployment rate is (7.2 / 133.9) * 100 = 5.4 percent.

Quiz 5: Monitoring Jobs and Inflation