Question 1

If an economy has a labor force of 1,000 workers out of which 900 are employed, then the unemployment rate of the economy is _____ percent.

Accepted Answer

The unemployment rate is calculated as the number of unemployed individuals divided by the labor force, then multiplied by 100. In this case, there are 100 unemployed workers (1,000 - 900) out of a labor force of 1,000, so the unemployment rate is (100 / 1,000) * 100 = 10%.

Question 2

An economy has a labor force of 1,000. The total number of employed workers in the economy is 900, and the number of discouraged workers in the economy is 50. The unemployment rate in the economy in this case is _____ percent.

Accepted Answer

The unemployment rate is calculated as the number of unemployed individuals divided by the labor force, then multiplied by 100. In this case, there are 100 unemployed individuals (1,000 labor force - 900 employed) out of a labor force of 1,000. Therefore, the unemployment rate is (100/1,000) * 100 = 10%. Discouraged workers are not included in the labor force calculation.

Question 3

The type of unemployment that occurs as a result of the time that it takes to match workers with jobs is known as _____ unemployment.

Accepted Answer

Frictional unemployment occurs when there is a temporary disconnection between workers and jobs, often due to the time it takes for workers to find new employment that matches their skills and preferences. This type of unemployment is considered a natural part of the job market.

Question 4

Full employment refers to the level of employment when there is no _____ unemployment.

Accepted Answer

Full employment refers to the situation where all available labor resources are being used in the most economically efficient way. At this level, the only types of unemployment that exist are frictional, structural, and seasonal. Cyclical unemployment, which is caused by economic downturns, is absent at full employment.

Question 5

The rate of unemployment when there is full employment in the economy is known as _____ unemployment.

Accepted Answer

The natural rate of unemployment refers to the unemployment level that exists when the economy is at full employment, accounting for frictional and structural unemployment but not cyclical unemployment. Cyclical unemployment is related to the business cycle, whereas seasonal and structural unemployment are not indicative of full employment conditions.

Question 6

Alex is a skilled furniture maker, but there are no jobs available in the economy that utilize his furniture-making skills. If Alex remains unemployed, then in which category of unemployment will he fall under?

Accepted Answer

Alex's situation is an example of structural unemployment, which occurs when there is a mismatch between the skills workers have and the skills needed for available jobs. In this case, Alex has furniture-making skills, but there are no available jobs that require those skills.

Question 7

Nancy lives in a beach town where there is a lot of demand for workers between April and September. During the other months, Nancy remains unemployed. Therefore, during those months Nancy will be categorized as _____ unemployed.

Accepted Answer

Nancy's unemployment is due to the seasonal nature of her job, which is common in industries that have peak periods at certain times of the year, such as tourism in a beach town. Seasonal unemployment occurs when people are unemployed at certain times of the year because their skills are in demand only during a specific season.

Question 8

_____ unemployment is caused by contractions in the economy.

Accepted Answer

Cyclical unemployment is directly related to the overall state of the economy and occurs during periods of economic downturn or recession, when there is a decrease in demand for goods and services, leading to job losses.

Question 9

The unemployment that results because of a mismatch between the skills that workers have and the skills that employers seek is known as _____ unemployment.

Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills that workers in the labor market offer and the skills demanded by employers. This can be due to technological changes, shifts in the economy, or other factors that change the types of jobs available or the skills needed for these jobs.

Question 10

Which of the following statements is NOT true?

Accepted Answer

Full employment includes not only frictional but also structural unemployment, as it represents the level of employment achieved when there is no cyclical unemployment. Structural unemployment is considered even at full employment due to ongoing changes in the economy and labor market.

Question 11

The economy of the country of Stewarton has a structural unemployment rate of 2 percent, a frictional unemployment rate of 3 percent, and a cyclical unemployment rate of 2 percent (because the economy is in a recession). If there is no seasonal unemployment, then what is the natural rate of unemployment for Stewarton?

Accepted Answer

The natural rate of unemployment is the sum of structural and frictional unemployment rates, which in this case is 2 percent + 3 percent = 5 percent.

Question 12

Which of the following statements is NOT true?

Accepted Answer

Discouraged workers, who are not actively seeking employment due to various reasons such as believing no jobs are available for them, are not counted as part of the labor force. This is because the labor force consists of individuals who are either employed or actively seeking employment.

Question 13

Which of the following statements is NOT true?

Accepted Answer

Discouraged workers are not counted as part of the labor force because they are not actively seeking employment, even though they would like to work.

Question 14

During a recession, an economy experiences an increase in the rate of _____ unemployment.

Accepted Answer

Cyclical unemployment increases during a recession because it is directly related to the rise and fall of economic output within a business cycle. When the economy contracts, companies reduce their workforce, leading to higher cyclical unemployment.

Question 15

Carlos is a fresh college graduate who is looking to find employment in advertising. He is currently interviewing with three firms but does not yet have an offer. Carlos will be counted in the category of _____ unemployment.

Accepted Answer

Frictional unemployment refers to the short-term unemployment of people who are changing jobs, entering the workforce, or transitioning from one job to another. Carlos is in the process of looking for a job in advertising after graduating, which is a typical example of frictional unemployment.

Question 16

An economy has 1,050 employed, 150 unemployed, and 150 discouraged workers. The unemployment rate for the economy is _____ percent.

Accepted Answer

The unemployment rate is calculated as (unemployed / (employed + unemployed)) * 100. Here, it is (150 / (1050 + 150)) * 100 = 10%. Discouraged workers are not included in the labor force.

Question 17

An economy has an unemployment rate of 10 percent and a total labor force of 2,000. Therefore, the economy has _____ employed workers and _____ unemployed workers.

Accepted Answer

The answer of An economy has an unemployment rate of...

Question 18

If the economy is at full employment, then there is no:

Accepted Answer

At full employment, the economy does not have cyclical unemployment, which is directly related to the cycles of economic expansion and contraction. Frictional and structural unemployment can still exist even when the economy is at full employment.

Question 19

If the total labor force of an economy is 1,000 and 40 of these people are unemployed, then the unemployment rate of the economy is _____ percent.

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed people by the total labor force and multiplying the result by 100. In this case, the unemployment rate is 40/1,000 * 100 = 4%.

Question 20

Which one of the following will benefit from an increase in the rate of inflation?

Accepted Answer

Inflation benefits borrowers who have fixed nominal interest rates on their loans because the real value of the money they repay is less than the value of the money when they borrowed it. This means that the firm in option C will pay back less in real terms than it borrowed.

Quiz 13: Measuring an Economys Performance

If an economy has a labor force of 1,000 workers out of which 900 are employed, then the unemployment rate of the economy is _____ percent.

An economy has a labor force of 1,000. The total number of employed workers in the economy is 900, and the number of discouraged workers in the economy is 50. The unemployment rate in the economy in this case is _____ percent.

The type of unemployment that occurs as a result of the time that it takes to match workers with jobs is known as _____ unemployment.

Full employment refers to the level of employment when there is no _____ unemployment.

The rate of unemployment when there is full employment in the economy is known as _____ unemployment.

Alex is a skilled furniture maker, but there are no jobs available in the economy that utilize his furniture-making skills. If Alex remains unemployed, then in which category of unemployment will he fall under?

Nancy lives in a beach town where there is a lot of demand for workers between April and September. During the other months, Nancy remains unemployed. Therefore, during those months Nancy will be categorized as _____ unemployed.

_____ unemployment is caused by contractions in the economy.

The unemployment that results because of a mismatch between the skills that workers have and the skills that employers seek is known as _____ unemployment.

Which of the following statements is NOT true?

Which of the following statements is NOT true?

Which of the following statements is NOT true?

During a recession, an economy experiences an increase in the rate of _____ unemployment.

Carlos is a fresh college graduate who is looking to find employment in advertising. He is currently interviewing with three firms but does not yet have an offer. Carlos will be counted in the category of _____ unemployment.

An economy has 1,050 employed, 150 unemployed, and 150 discouraged workers. The unemployment rate for the economy is _____ percent.

An economy has an unemployment rate of 10 percent and a total labor force of 2,000. Therefore, the economy has _ employed workers and _ unemployed workers.

If the economy is at full employment, then there is no:

If the total labor force of an economy is 1,000 and 40 of these people are unemployed, then the unemployment rate of the economy is _____ percent.

Which one of the following will benefit from an increase in the rate of inflation?