Question 1

If the duration of unemployment in a country increases from 16 weeks to 18 weeks, then

Accepted Answer

If the duration of unemployment in a country increases, it means that people are staying unemployed for a longer period of time. This leads to an increase in the number of people who are classified as unemployed, and therefore an increase in the unemployment rate. Option A or Option C is also wrong as there is no reason to suggest that a change in duration of unemployment would lead to the labor force size changing in either direction.

Question 2

To be considered officially unemployed, a person must be at least 16 years old

Accepted Answer

To be considered officially unemployed, a person must not be working but actively seeking employment. The other options are not accurate as a person can still be in school or be a discouraged worker and be considered unemployed.

Question 3

Which of the following people would be considered unemployed by the Bureau of Labor Statistics? I. Mrs. X retires from her job and does not look for another job.
II) Mr. Y was laid off from his job as a welder, but expects to be rehired in 8 months.

Accepted Answer

The answer of Which of the following people would be...

Question 4

Which of the following can cause official unemployment figures to underestimate the true unemployment rate?

Accepted Answer

Official unemployment figures only count individuals who are actively seeking employment. When people become discouraged and stop looking for work, they are no longer counted as part of the workforce and are not included in the official unemployment rate.

Question 5

The population is 1,200 million, the labor force is 150 million, and the number of unemployed is 15 million. What is the unemployment rate?

Accepted Answer

Unemployment rate = (number of unemployed / labor force) x 100 
= (15 million / 150 million) x 100 
= 10 percent

Question 6

Who is considered officially unemployed?

Accepted Answer

Monica graduated from college and has actively searched for a job but has been unable to find one, making her officially unemployed. Abba quit looking for a job six months after failing to get one, so he is no longer considered part of the labor force and is not officially unemployed. Kariuki is a retired teacher and is not seeking employment, so he is also not officially unemployed. Chen is going to school full time and is also not actively seeking employment, so he is not officially unemployed.

Question 7

The unemployment rate will rise when

Accepted Answer

The answer of The unemployment rate will rise when
...

Question 8

One major reason that economists are concerned about unemployment is that

Accepted Answer

Unemployment means that people who are willing and able to work are not able to find employment, leading to a loss in potential output. This means that the economy is producing less than it could be producing if there were full employment.

Question 9

The labor force participation rate includes

Accepted Answer

The labor force participation rate includes both employed workers and those unemployed but seeking employment. It does not include discouraged workers who are not seeking jobs.

Question 10

To be officially counted as unemployed, a person must be

Accepted Answer

To be officially counted as unemployed, a person must be at least 16 years old, according to the definitions used by most labor statistics agencies, including the U.S. Bureau of Labor Statistics.

Question 11

The labor force is defined as

Accepted Answer

The labor force includes all individuals who are at least 16 years old and are either currently employed or unemployed but looking for work. This definition excludes those who are not seeking employment.

Question 12

In recent years the labor force participation rate has been fairly stable,

Accepted Answer

The overall labor force participation rate has been fairly stable in recent years, but this stability masks underlying trends: the male labor force participation rate has been declining, while the female labor force participation rate has been increasing. This reflects broader social and economic changes, including shifts in the types of jobs available, changing societal norms around gender roles, and improvements in women's access to education and professional opportunities.

Question 13

If there is unemployment and all businesses are operating at less than full capacity, then

Accepted Answer

If all businesses are operating at less than full capacity, it means the economy is producing below its potential output. This implies that society is producing inside its production possibilities curve, which shows the maximum amount of output that can be produced with the available resources and technology. Therefore, the economy is not using its resources efficiently and there is room for growth and expansion.

Question 14

Which of the following individuals is NOT counted as unemployed?

Accepted Answer

In order to be considered unemployed, an individual must be actively seeking employment. Jack has stopped looking, therefore he is not counted as unemployed. Jamil, Jackie, and Jennifer are all actively searching for jobs and would be considered part of the labor force, whether or not they are currently employed.

Question 15

The duration of unemployment tends to

Accepted Answer

When business activity decreases, companies may lay off employees and the demand for labor decreases, leading to a longer duration of unemployment.

Question 16

Over the last 100 years in the United States, unemployment reached its highest rate

Accepted Answer

The Great Depression in the 1930s resulted in the highest unemployment rate in US history, peaking at 24.9% in 1933. While there were periods of high unemployment in the other decades listed, none of them reached the level seen during the Great Depression.

Question 17

To be officially classified as unemployed, a person must be

Accepted Answer

To be officially classified as unemployed, a person must meet certain criteria, including being at least 16 years old, not working, and actively seeking employment. Collecting unemployment benefits is not a requirement for being classified as unemployed, and simply not working due to being under 18 or being laid off or fired does not automatically qualify someone as unemployed without also actively seeking employment.

Question 18

Jasime voluntarily quit her job and is now searching for a new position. Jasime is classified as a

Accepted Answer

Jasmine quit her job voluntarily, so she is classified as a job leaver.

Question 19

People who have dropped out of the labor force and who are no longer looking for a job because they believe the job market has little to offer them are classified by the Labor Department as

Accepted Answer

People who have dropped out of the labor force and are no longer looking for work because they believe there are no suitable job offerings available are classified by the Labor Department as discouraged workers. This group is not counted in the official unemployment rate because they are not seeking work actively.

Question 20

Costs of unemployment include

Accepted Answer

When there is unemployment, the economy is not operating at its full capacity which means there is a decrease in total output leading to a decrease in overall income.

Quiz 7: The Macroeconomy: Unemployment, Inflation, and Deflation