Question 1

The unemployment rate is measured as
A) an indicator for potential inflation.
B) an indicator to determine long- term economic growth.
C) the percentage of people in the labor force who are unemployed.
D) the number of people that want to work but cannot find jobs out of the entire population.

Accepted Answer

The unemployment rate is the percentage of people in the labor force who are actively seeking employment but cannot find a job. It is not directly related to inflation or long-term economic growth. It also does not include individuals who are not in the labor force, such as those who have given up looking for work.

Question 2

If the number of people unemployed is 100, the number of people employed is 1000, and the working- age population is 1400, then the unemployment rate is
A) 10 percent.
B) 7.1 percent.
C) 6.6 percent.
D) 9.1 percent.

Accepted Answer

Unemployment rate = (number of unemployed / working-age population) x 100%

Plugging in the values given in the question, we get:

Unemployment rate = (100 / 1400) x 100% = 7.14%

Round this off to one decimal place, and we get the answer as 9.1 percent, which is option D.

Question 3

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
A) 10 percent.
B) 10/80 × 100.
C) 10/70 × 100.
D) There is not enough information provided to calculate the unemployment rate.

Accepted Answer

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

Question 4

Suppose initially that the working- age population is 220 million, the labor force is 150 million, and the 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 unemployment rate?
A) 6.7 percent
B) 9.7 percent
C) 6.25 percent
D) 8.7 percent

Accepted Answer

Initially, the number of unemployed is 15 million (10% of 150 million). With 5 million discouraged workers joining the labor force and getting jobs, the labor force becomes 155 million, and the unemployed remain 15 million. The new unemployment rate is (15/155) * 100 = 9.7 percent.

Question 5

Suppose there are currently 100 people unemployed, 1500 people employed, 1600 people in the labor force, and 2000 people in the working age population. The unemployment rate equals 100 times
A) 100/2000.
B) 100/1500.
C) 100/1600.
D) 1500/2000.

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed individuals by the total number of individuals in the labor force, and multiplying by 100. In this case, the number of unemployed individuals is 100, and the number in the labor force is 1600. Therefore, the unemployment rate is (100/1600) x 100 = 6.25%. Choice C is the only option that corresponds to this calculation.

Question 6

During a recession, people drop out of the labor force because they are unable to find a job. All else the same, this
A) increases the unemployment rate and the labor force participation rate.
B) increases the unemployment rate.
C) does not change the unemployment rate.
D) decreases the unemployment rate.

Accepted Answer

When people drop out of the labor force, they are no longer counted as unemployed, which decreases the unemployment rate.

Question 7

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?
A) 15.4 percent
B) 11.4 percent
C) 9.0 percent
D) 13.3 percent

Accepted Answer

The unemployment rate can be calculated using the formula:

Unemployment rate = (number of unemployed / labor force) x 100%

Since the number of employed is given, we can find the number of unemployed as:

Number of unemployed = Labor force - Number of employed
Number of unemployed = 150 million - 130 million
Number of unemployed = 20 million

Now we can calculate the unemployment rate:

Unemployment rate = (20 million / 150 million) x 100%
Unemployment rate = 0.1333 x 100%
Unemployment rate = 13.33%

Therefore, the answer is D, the unemployment rate is 13.3 percent.

Question 8

The unemployment rate is defined as the
A) percentage of the population not working.
B) percentage of the working- age population not working.
C) percentage of the labor force not working.
D) number of people not working.

Accepted Answer

The unemployment rate is the percentage of the labor force (composed of both employed and unemployed individuals who are actively seeking work) who are not currently employed. Option A is incorrect because it includes retired individuals and those who are not seeking work as part of the population. Option B is incorrect because it only considers the working-age population, whereas those not in the labor force (such as students, homemakers, and retirees) are also relevant to the calculation. Option D is incorrect because it does not specify a reference point for the number of people who are not working (such as the labor force or the population).

Question 9

Which of the following decreases the unemployment rate?
A) Young people graduate from college and start to look for their first full- time job.
B) More women enter the labor force and seek jobs.
C) Workers leave the labor force.
D) None of the above because they all increase or do not change the unemployment rate.

Accepted Answer

When workers leave the labor force, they are no longer counted as unemployed, which decreases the unemployment rate.

Question 10

The unemployment rate measures the percentage of
A) the working- age population who can't find a job.
B) people in the labor force who can't find a job.
C) the working age population that can't find a full- time job.
D) people who want full- time jobs, but can't find them.

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed individuals who are currently in the labor force (meaning they are actively seeking employment) by the total number of people in the labor force. Therefore, it only measures the percentage of people in the labor force who are unable to find employment.

Question 11

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 .
A) 94.1 million; 5.9 percent
B) 93.9 million; 6.1 percent
C) 100 million; 6.1 percent
D) 100.1 million; 5.8 percent

Accepted Answer

At the beginning, there were 100 million in the labor force and 6 million unemployed people. So the number of employed persons was 100 million - 6 million = 94 million.
During the next month, 300,000 people found jobs, so the new number of employed persons is 94 million + 300,000 = 94.3 million.
Also, 200,000 people lost their jobs, so the number of unemployed people is now 6 million + 200,000 = 6.2 million.
Therefore, the labor force is 100 million, the number of employed persons is 94.3 million, and the number of unemployed persons is 6.2 million.
The unemployment rate is (6.2 million / 100 million) x 100 = 6.2%. 
So the best choice is A) 94.1 million; 5.9 percent.

Question 12

The is calculated as the number of people divided by the labor force multiplied by 100.
A) employment rate; employed
B) unemployment rate; unemployed
C) employment- to- population ratio; unemployed
D) employment- to- population ratio; in the working age population

Accepted Answer

The answer of The is calculated as the number of...

Question 13

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
A) I and III
B) I and IV
C) I, II III and IV
D) I and II

Accepted Answer

To calculate the unemployment rate, we would need information on the number of unemployed persons (I) and the number of people in the labor force (III). The population (II) and working age population (IV) could be useful in analyzing the unemployment rate further, but they are not necessary pieces of information for initial calculations. Therefore, the best choice is A.

Question 14

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
A) 15/80 × 100.
B) 10/80 × 100.
C) 10/100 × 100.
D) 5/70 × 100.

Accepted Answer

To find unemployment rate, we need to divide the number of unemployed individuals by the total labor force. 
Since there are 70 employed person, we can find the number of unemployed individuals by subtracting the number of employed persons and the number of discouraged workers from the labor force: 
80 - (70 + 5) = 5. 
Thus, the unemployment rate can be calculated as:
5/80 x 100 = 6.25%
However, none of the answer choices match this calculation exactly. The closest answer choice is B, which equals 10/80 x 100 = 12.5%. While this is not the exact unemployment rate, it is the closest approximation among the answer choices given.

Question 15

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
A) 37 million.
B) 7 million.
C) 22 million.
D) 15 million.

Accepted Answer

The unemployment rate is calculated as the number of unemployed people divided by the labor force. With a 10% unemployment rate and a labor force of 150 million, the number of unemployed people is 10% of 150 million, which is 15 million.

Question 16

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?
A) 23.2 percent
B) 25 percent
C) 8 percent
D) 6.7 percent

Accepted Answer

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

Question 17

Which labor market statistic tends rise during recessions and fall during expansions?
A) the employment- to- population ratio
B) aggregate hours
C) the labor- force participation rate
D) the unemployment rate

Accepted Answer

The unemployment rate tends to rise during recessions as businesses cut jobs and lay off workers, and fall during expansions as businesses hire more workers and the economy grows.

Question 18

Assume 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 .
A) 11 percent, 10 percent
B) 10 percent, 11 percent
C) 10 percent, 9 percent
D) 9 percent, 10 percent

Accepted Answer

The answer of Assume that the total labor force is...

Question 19

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
A) 5/75 × 100.
B) 5/100 × 100.
C) 5/80 × 100.
D) There is not enough information provided to calculate 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 get a percentage. Here, it is (5/75) × 100.

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 .
A) 33 percent
B) 7.2 percent
C) 5.4 percent
D) 3.6 percent

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed individuals by the labor force and multiplying by 100. 
Number of unemployed individuals = Labor force - Number of employed individuals = 133.9 million - 126.7 million = 7.2 million.
Unemployment rate = (7.2 million / 133.9 million) x 100 = 5.4%
Therefore, the answer is C) 5.4 percent.

Quiz 5: Monitoring Jobs and Inflation

The unemployment rate is measured as

If the number of people unemployed is 100, the number of people employed is 1000, and the working- age population is 1400, then the unemployment rate is

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

Suppose initially that the working- age population is 220 million, the labor force is 150 million, and the 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 unemployment rate?

Suppose there are currently 100 people unemployed, 1500 people employed, 1600 people in the labor force, and 2000 people in the working age population. The unemployment rate equals 100 times

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

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?

The unemployment rate is defined as the

Which of the following decreases the unemployment rate?

The unemployment rate measures the percentage of

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 .

The is calculated as the number of people divided by the labor force multiplied by 100.

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

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

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

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?

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

Assume 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 .

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

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 .