Deck 11: Unemployment and Labor Force Participation

Question 1

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. How many discouraged workers does this country have?

A) 5 million
B) 10 million
C) 15 million
D) 20 million

Answer 1

5 million

Question 2

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. How many people in this country are in the labor force?

A) 15 million
B) 20 million
C) 25 million
D) 30 million

Answer 2

20 million

Question 3

Which of the following is considered unemployed?

A) Jason, a full-time college student, is looking for a part-time job.
B) Julie, a full-time housewife, is searching for a part-time position.
C) Joe, a retired college professor, does community volunteer work.
D) John, on temporary layoff from his work, awaits recall.

Answer 3

John, on temporary layoff from his work, awaits recall.

Question 4

Use the following to answer questions: Table: Employment, Unemployment, and Labor Force Participation $$\begin{array} { l r r } \hline \text { Year } & \mathbf { 2 0 0 9 } & \mathbf { 2 0 1 0 } \\\hline \text { Population } & 380 \text { million } & 400 \text { million } \\\text { Adults in labor force } & 255 \text { million } & 260 \text { million } \\\text { Adults not in labor force } & 78 \text { million } & 80 \text { million } \\\text { Employed workers } & 245 \text { million } & 247 \text { million } \\\hline\end{array}$$

-(Table: Employment, Unemployment, and Labor Force Participation) Refer to the table. What is the employment rate of the country in 2009?

A) 95%
B) 96%
C) 97%
D) 98%

Question 5

A country's total civilian noninstitutionalized adult population is 1 million, and 500,000 people in this country are working, with another 20,000 people looking for work. Which of the following statements about the labor force statistics in this country is accurate?

A) The employment rate is 50% and the unemployment rate is 2%.
B) The unemployment rate is 2% and the labor force participation rate is 52%.
C) The employment rate is 96.15% and the labor force participation rate is 52%.
D) The labor force is 500,000 and the labor force participation rate is 50%.

Question 6

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. What is this country's underemployment rate?

A) 20%
B) 25%
C) 40%
D) 60%

Question 7

Use the following to answer questions: Table: Employment, Unemployment, and Labor Force Participation $$\begin{array} { l r r } \hline \text { Year } & \mathbf { 2 0 0 9 } & \mathbf { 2 0 1 0 } \\\hline \text { Population } & 380 \text { million } & 400 \text { million } \\\text { Adults in labor force } & 255 \text { million } & 260 \text { million } \\\text { Adults not in labor force } & 78 \text { million } & 80 \text { million } \\\text { Employed workers } & 245 \text { million } & 247 \text { million } \\\hline\end{array}$$

-(Table: Employment, Unemployment, and Labor Force Participation) Refer to the table. What is the unemployment rate of the country in 2010?

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

Question 8

If the adult population of a country is 200 million, 100 million are employed, and 10 million are unemployed, this country's labor force participation rate is:

A) 5%.
B) 9%.
C) 50%.
D) 55%.

Question 9

A person is classified as unemployed only if he or she is:

A) unwilling and unable to work and cannot find a job.
B) unwilling but able to work and cannot find a job.
C) willing but unable to work and cannot find a job.
D) willing and able to work but cannot find a job.

Question 10

Why did 36,000 travel agents lose their jobs between 1999 and 2006?

A) There was a large decline in tourism in those years.
B) More people started making their travel arrangements online.
C) They spent too much time taking vacations of their own and got fired.
D) They became professional athletes.

Question 11

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. What is this country's unemployment rate?

A) 10%
B) 16.7%
C) 25%
D) 40%

Question 12

If the adult population of a country is 200 million, 100 million are employed, and 10 million are unemployed, this country's unemployment rate is:

A) 5%.
B) 9.1%.
C) 10%.
D) 11%.

Question 13

Which of the following is part of the labor force?

A) a homemaker
B) a full-time student
C) a person who was laid off and is now looking for work
D) a retiree

Question 14

If the adult population of a country is 200 million, 100 million are employed, and 10 million are unemployed, this country's labor force is:

A) 200 million.
B) 190 million.
C) 110 million.
D) 100 million.

Question 15

Which of the following would be considered unemployed?

A) Mark, laid off from his job as a bricklayer, returned to school full-time.
B) Sarah, a stay-at-home mom who earned nearly $80,000 per year in her previous job.
C) Tim, a 13-year-old high school student, is looking for a part-time job.
D) Janice, a senior in college, started job hunting early in the hope that she would have secured a job by the time she graduates in May.

Question 16

The labor force consists of:

A) employed workers only.
B) adults who do not have a job but who are looking for work.
C) employed workers and adults who do not have jobs but who are looking for work.
D) all adult noninstitutionalized civilians.

Question 17

Use the following to answer questions: Table: Employment, Unemployment, and Labor Force Participation $$\begin{array} { l r r } \hline \text { Year } & \mathbf { 2 0 0 9 } & \mathbf { 2 0 1 0 } \\\hline \text { Population } & 380 \text { million } & 400 \text { million } \\\text { Adults in labor force } & 255 \text { million } & 260 \text { million } \\\text { Adults not in labor force } & 78 \text { million } & 80 \text { million } \\\text { Employed workers } & 245 \text { million } & 247 \text { million } \\\hline\end{array}$$

-(Table: Employment, Unemployment, and Labor Force Participation) Refer to the table. What is the labor force participation rate of this country in 2009?

A) 64%
B) 67%
C) 77%
D) 88%

Question 18

An unemployed person is one who:

A) stays at home and is not looking for work.
B) works for a job that pays less than he or she expected.
C) is not willing to work even though he or she is able to.
D) does not have a job but is actively looking for one.

Question 19

A country has 50 million people, 30 million of whom are adults. Of the adults, 5 million are not interested in working, another 5 million are interested in working but have given up looking for work, and 5 million are still looking for work. Of those who do have jobs, 5 million are working part time but would like to work full time, and the remaining 10 million are working full time. What is this country's labor force participation rate?

A) 50%
B) 66.7%
C) 75%
D) 83.3%

Question 20

Use the following to answer questions: Table: Employment, Unemployment, and Labor Force Participation $$\begin{array} { l r r } \hline \text { Year } & \mathbf { 2 0 0 9 } & \mathbf { 2 0 1 0 } \\\hline \text { Population } & 380 \text { million } & 400 \text { million } \\\text { Adults in labor force } & 255 \text { million } & 260 \text { million } \\\text { Adults not in labor force } & 78 \text { million } & 80 \text { million } \\\text { Employed workers } & 245 \text { million } & 247 \text { million } \\\hline\end{array}$$

-(Table: Employment, Unemployment, and Labor Force Participation) Refer to the table. What is the labor force participation rate of this country in 2010?

A) 72%
B) 76%
C) 85%
D) 93%

Question 21

Use the following to answer questions: Table: Employment, Unemployment, and Labor Force Participation $$\begin{array} { l r r } \hline \text { Year } & \mathbf { 2 0 0 9 } & \mathbf { 2 0 1 0 } \\\hline \text { Population } & 380 \text { million } & 400 \text { million } \\\text { Adults in labor force } & 255 \text { million } & 260 \text { million } \\\text { Adults not in labor force } & 78 \text { million } & 80 \text { million } \\\text { Employed workers } & 245 \text { million } & 247 \text { million } \\\hline\end{array}$$

-(Table: Employment, Unemployment, and Labor Force Participation) Refer to the table. What is the unemployment rate of the country in 2009?

A) 3%
B) 3.9%
C) 4%
D) 5%

Question 22

The percentage of adults in the labor force is the:

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

Question 23

Which of the following best defines a nation's labor force?

A) the total number of persons between the ages of 16 and 65
B) the total number of employed and unemployed persons
C) the total number of persons working full time and part time
D) the total number of persons who are willing and able to work but cannot find a job

Question 24

An unemployed person is best defined as an adult who:

A) does not have a job but is looking for work.
B) is working fewer hours than she wants to.
C) is a full-time homemaker or a full-time student and is therefore not working.
D) has given up looking for work after being laid off for a long period of time.

Question 25

What is the unemployment rate for a nation with 6 million employed and 2 million unemployed?

A) 10%
B) 15%
C) 20%
D) 25%

Question 26

When workers lose their jobs and become officially unemployed, the number of people in the labor force:

A) remains constant.
B) increases.
C) decreases.
D) becomes difficult to predict.

Question 27

In a country where both the labor force participation rate and the unemployment rate are very low, which of the following answers explains why this may be the case?

A) A large percentage of the population consists of children.
B) A large percentage of the population is aging and thus has retired.
C) A large percentage of the population is unemployed.
D) A large percentage of the population is employed.

Question 28

Which of the following individuals can be counted as unemployed?

A) Darren, a 10-year-old child
B) Moesha, a full-time college student
C) Nazma, a stay-at-home mom
D) Juan, a recent college graduate looking for his first job

Question 29

Adults who do not have a job but who are looking for work are:

A) unemployed.
B) not part of the labor force.
C) unwilling to accept employment.
D) discouraged workers.

Question 30

Which of the following is an example of an unemployed person?

A) a retiree working as a volunteer in a hospital
B) a worker who is willing to work more hours if available
C) a recent college graduate looking for her first job
D) a full-time student working part time at night

Question 31

When workers lose their jobs and become officially unemployed, the unemployment rate:

A) remains constant.
B) increases.
C) decreases.
D) becomes difficult to predict.

Question 32

Use the following to answer questions: Table: Employment, Unemployment, and Labor Force Participation $$\begin{array} { l r r } \hline \text { Year } & \mathbf { 2 0 0 9 } & \mathbf { 2 0 1 0 } \\\hline \text { Population } & 380 \text { million } & 400 \text { million } \\\text { Adults in labor force } & 255 \text { million } & 260 \text { million } \\\text { Adults not in labor force } & 78 \text { million } & 80 \text { million } \\\text { Employed workers } & 245 \text { million } & 247 \text { million } \\\hline\end{array}$$

-(Table: Employment, Unemployment, and Labor Force Participation) Refer to the table. What is the employment rate of the country in 2010?

A) 95%
B) 96%
C) 97%
D) 98%

Question 33

A country has 24 million people in the labor force, and 21.5 million of them are employed. What is the unemployment rate in this country?

A) 2.5%
B) 10.4%
C) 21.5%
D) 89.6%

Question 34

What population categories go into the formula for the unemployment rate?

A) unemployed and employed
B) civilian, military, and unemployed
C) adults not in labor force, employed, and unemployed
D) unemployed, employed, and discouraged workers

Question 35

Use the following to answer questions: Table: Labor Data $$\begin{array} { l r } \hline \text { Adult population } & 200 \text { million } \\\text { Labor force } & 150 \text { million } \\\text { Employed persons } & 138.75 \text { million } \\\text { Discouraged workers } & 10.5 \text { million }\end{array}$$

-(Table: Labor Data) According to the accompanying labor data, the unemployment rate is:

A) 7%.
B) 0.7%.
C) 5.6%.
D) 7.5%.

Question 36

Which of the following individuals can be counted as unemployed?

A) Hannah and Harold, who are serving time for armed robbery
B) Jason and Jill, who have not looked for work for the last 2 years
C) Stewart and Susan, who are currently housed in a mental institution
D) Jean, who left her job to search for a higher-paying position

Question 37

Which of the following individuals can be counted as unemployed?

A) a woman who works only part time
B) a temp worker, who is currently responding to job advertisements from the newspaper
C) a man who was laid off from an auto manufacturing plant in Detroit
D) a husband who stays at home to raise his two children

Question 38

The labor force is made up of:

A) institutionalized people, the military, and employed workers.
B) employed and unemployed workers.
C) unemployed workers, employed workers, and students over 16 years of age.
D) all adult noninstitutionalized civilians.

Question 39

Use the following to answer questions: Table: Labor Data $$\begin{array} { l r } \hline \text { Adult population } & 200 \text { million } \\\text { Labor force } & 150 \text { million } \\\text { Employed persons } & 138.75 \text { million } \\\text { Discouraged workers } & 10.5 \text { million }\end{array}$$

-(Table: Labor Data) According to the accompanying labor data, the labor force participation rate is:

A) 60.4%.
B) 99.3%.
C) 69.4%.
D) 75%.

Question 40

Which of the following individuals can be counted as part of the labor force?

A) someone who retired 4 months ago
B) someone who is collecting unemployment benefits
C) someone who just celebrated a fifteenth birthday
D) someone who is on active military duty in Afghanistan

Question 41

Which of the following would NOT be counted as employed?

A) an underemployed person
B) an employee working overtime every day
C) a part-time worker
D) a discouraged worker

Question 42

Which of the following is NOT a reason the unemployment rate is considered to be an incomplete indicator of the overall health of the labor market?

A) It does not measure how well people are matched to the jobs they do.
B) It does not count discouraged workers.
C) It does not correctly define the adult population.
D) It counts part-time workers who would like to work full time as employed.

Question 43

Creative destruction occurs at the level of the:

A) firm.
B) industry.
C) entire economy.
D) firm, industry, and entire economy.

Question 44

Frictional unemployment is best defined as:

A) long-term unemployment caused by changing features of an economy.
B) short-term unemployment caused by difficulties of matching employees to employers.
C) unemployment caused by cyclical conditions of an economy.
D) a normal level of unemployment caused by high wages.

Question 45

What is the term for workers who have given up looking for a job but would still like one?

A) jobless workers
B) discouraged workers
C) laid off workers
D) discarded workers

Question 46

Several years ago, the rising popularity of Barnes & Noble and Borders shifted workers from independent bookshops to larger chains. What type of unemployment was associated with this reallocation of the work force?

A) frictional unemployment
B) technological substitution
C) creative destruction
D) structural unemployment

Question 47

Discouraged workers are counted as part of the:

A) labor force.
B) unemployed.
C) employed.
D) adult population.

Question 48

In a nonrecession year, the majority of U.S. unemployment is:

A) frictional.
B) structural.
C) cyclical.
D) recurrent.

Question 49

What is one of the causes of frictional unemployment?

A) uneducated work force
B) willingness to take lower level jobs
C) scarcity of information
D) overabundance of job vacancies

Question 50

Discouraged workers are people who:

A) have given up looking for work but would still like to work.
B) are willing and able to work but cannot find a job.
C) are looking for a job that pays more than they are currently earning.
D) are working for fewer hours than they want to.

Question 51

The presence of discouraged workers causes the measured unemployment rate to be:

A) correctly stated.
B) overstated.
C) understated.
D) either overstated, understated, or correctly stated.

Question 52

The unemployment rate measures the:

A) quality of jobs.
B) number of discouraged workers.
C) number of underemployed workers.
D) share of the labor force that is unemployed.

Question 53

Which of the following would the BLS define as a discouraged worker?

A) Quinton, who has a doctorate in chemistry, but works full time as a taxi driver
B) Robert, a retired teacher, who works full time as a greeter at a discount store
C) Mary, who was laid off last year and who was looking for a full-time job until last month
D) Susan, who has been unemployed for the past three years and is looking for a part-time job

Question 54

Discouraged workers are workers who have:

A) given up looking for work but would still like a job.
B) given up looking for work and are not available for work.
C) not given up looking for work but are not available for work.
D) not given up looking for work and still would like a job.

Question 55

Individuals who have given up looking for work but still would take a job are considered:

A) unemployed workers.
B) displaced workers.
C) discouraged workers.
D) part of the labor force.

Question 56

A discouraged worker is a:

A) person working for fewer hours than he or she prefers.
B) worker being discouraged by his or her employer when asking for a promotion.
C) person who has given up looking for work but would still like a job if one is available.
D) unemployed person who has temporary part-time employment.

Question 57

Discouraged workers and underemployed workers are examples of:

A) workers not included in the unemployment rate.
B) populations that cause higher unemployment taxes.
C) users of unemployment insurance.
D) poor national employment planning.

Question 58

The short-term unemployment caused by the ordinary difficulties of matching employee to employer is called:

A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) seasonal unemployment.

Question 59

According to the Bureau of Labor Statistics, which of the following would be counted as unemployed?

A) discouraged workers
B) workers who are overqualified for their current position
C) workers who have a part-time job but want a full-time job
D) new graduates who are looking for their first job

Question 60

Frictional unemployment is caused by:

A) creative destruction.
B) recessions.
C) the transformation of the United States into a service economy.
D) the changing seasons of the year.

Question 61

The most likely influence of the Internet on the rate of frictional unemployment has been to:

A) raise it.
B) lower it.
C) have no effect on it.
D) have an unpredictable effect on it.

Question 62

Someone who recently moved to Florida because of its warmer climate will need to spend some time looking for a new job. This is an example of:

A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) underemployment.

Question 63

Frictional unemployment is:

A) short-term unemployment due to the normal difficulties of matching employers and employees.
B) persistent and long-term unemployment caused by shocks that make it more difficult for workers to find jobs.
C) long-term employment caused by a mismatch between the skills workers possess and the skills that the market is looking to hire.
D) unemployment due to fluctuations in the business cycle.

Question 64

Oil shocks, the shift from manufacturing to service jobs, and the use of new technologies are reasons for _____ unemployment.

A) frictional
B) cyclical
C) structural
D) permanent

Question 65

The shift toward more of a service economy and less of a manufacturing economy in the United States has caused an increase in:

A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) seasonal unemployment.

Question 66

The persistent, long-term unemployment caused by long-lasting shocks or permanent features of an economy is called:

A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) seasonal unemployment.

Question 67

Over the past few decades, the U.S. economy has switched from a primarily manufacturing economy to a service economy. Many individuals working in manufacturing positions lost their jobs, and many new jobs opened up in services. For those who lost jobs in manufacturing, this is an example of:

A) industry unemployment.
B) frictional unemployment.
C) structural unemployment.
D) cyclical unemployment.

Question 68

When it occurs at the industry level, Joseph Schumpeter's "creative destruction" results in:

A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) underemployment.

Question 69

The causes of frictional unemployment include:

A) the business cycle.
B) the scarcity of information.
C) changes of economic structure.
D) labor unions.

Question 70

Which of the following is the best example of frictional unemployment?

A) John, a coal miner, was laid off because of a lack of demand for workers in his industry. He is looking into new opportunities in computer programming, but they require him to gain some new skills.
B) Heather recently graduated with her doctorate in economics. She is searching for a job that matches her skills.
C) Peter, a highly skilled construction worker, lost his job when the recession began. He is looking for work, but demand in the construction industry is still low.
D) Allison, a recent high school graduate with high aspirations, is seeking a job as the CEO of a Fortune 500 company.

Question 71

Following the great recession in 2010, the largest fraction of unemployment in the United States had lasted:

A) less than 5 weeks.
B) between 5 and 14 weeks.
C) between 15 and 26 weeks.
D) more than 27 weeks.

Question 72

When not in a recession, the largest fraction of unemployment in the United States lasts:

A) less than 5 weeks.
B) between 5 and 14 weeks.
C) between 15 and 26 weeks.
D) more than 27 weeks.

Question 73

Which type of unemployment is an outcome of economist Joseph Schumpeter's "creative destruction" process within an industry?

A) cyclical unemployment
B) structural unemployment
C) seasonal unemployment
D) frictional unemployment

Question 74

Which of the following does NOT contribute directly to the persistence of structural unemployment?

A) unemployment benefits
B) unions
C) employment protection laws
D) work tests

Question 75

During a typical nonrecession year, the duration for at least half of the unemployed is:

A) less than 1 week.
B) less than 14 weeks.
C) between 15 and 26 weeks.
D) more than 27 weeks.

Question 76

Structural unemployment is:

A) caused by the ordinary difficulties of matching employee to employer.
B) caused by long-lasting shocks or changes in permanent features of an economy.
C) unemployment correlated with the business cycle.
D) natural unemployment.

Question 77

Which of the following is a case of frictional unemployment?

A) Timothy is looking for a job where he can apply his expertise in computer programming.
B) Terrance is one of more than a dozen applicants for a position teaching high school math.
C) Tina was laid off temporarily while her company downsized.
D) Thomas recently quit his job to start his own business.

Question 78

Which of the following programs could help overcome structural unemployment?

A) worker retraining
B) limitations to unemployment benefits
C) job-search assistance programs
D) worker retraining, limiting unemployment benefits, and job-search assistance

Question 79

A worker repairing VHS cassette-tape players was laid off because most of his customers have started using DVD players. This worker is now:

A) a discouraged worker.
B) frictionally unemployed.
C) cyclically unemployed.
D) structurally unemployed.

Question 80

Which of the following is TRUE of frictional unemployment?

A) It arises as a result of too much market competition.
B) It has a short duration.
C) It is a result of the minimum wage law.
D) It rises in a recession.