Question 1

A nation has a population of 300 million people.Of these, 80 million are retired, in the military, in institutions, or under 15 years old.There are 210 million who are employed.What is the unemployment rate?
A)3.3 percent
B)3.6 percent
C)4.5 percent
D)5.2 percent

Accepted Answer

The total population is 300 million. The number of retired, in military, institutions or under 15 years old is 80 million. Therefore, the number of people available to work is 300 - 80 = 220 million. The number of employed people is 210 million. Therefore, the number of unemployed people is 220 - 210 = 10 million. To calculate the unemployment rate, we divide the number of unemployed people by the number of people available to work, and then multiply by 100 to get a percentage. So, (10/220) x 100 = 4.545 or 4.5 percent, rounded to one decimal place. Therefore, the answer is C, 4.5 percent.

Question 2

In an economy, 35 million workers are employed out of a labour force of 50 million and a total population of 70 million.The unemployment rate is:
A)15 percent.
B)25 percent.
C)50 percent.
D)30 percent.

Accepted Answer

The answer of In an economy, 35 million workers are...

Question 3

Suppose there are 5 million unemployed workers seeking jobs.After a period of time, 1 million of them become discouraged over their job prospects and cease to look for work.As a result of this, the official unemployment rate would:
A)increase in the short run but eventually decline.
B)increase.
C)decline.
D)be unchanged.

Accepted Answer

The official unemployment rate would decline because discouraged workers are not counted as part of the labor force, thus reducing the number of unemployed individuals in the calculation.

Question 4

The best example of a "frictionally unemployed" worker is one who:
A)reduces productivity by causing frictions in a business.
B)is laid off during a recessionary period in the economy.
C)is in the process of voluntarily switching jobs.
D)is discouraged and not actively seeking work.

Accepted Answer

A frictionally unemployed worker is one who is temporarily out of work because they are transitioning from one job to another, voluntarily. This type of unemployment is considered natural and occurs even in a healthy economy. Option A refers to a worker who causes problems for the company, which is not the same as frictional unemployment. Option B refers to someone who was laid off, which is not necessarily temporary or voluntary. Option D refers to a worker who has given up on finding a job and is not actively seeking work.

Question 5

A headline reads: "Steel industry suffers slump as import competition increases and unemployment rises." This type of unemployment can best be characterized in economic terms as:
A)frictional.
B)structural.
C)cyclical.
D)natural.

Accepted Answer

The steel industry's slump resulting from import competition indicates a shift in the structure of the economy, leading to a decrease in demand for steel workers with specific skills. This type of unemployment is called structural unemployment. Additionally, since the article mentions rising general unemployment levels, it suggests that this type of unemployment is not just affecting the steel industry but is also contributing to a larger economic downturn.

Question 6

Official unemployment statistics:
A)understate unemployment because individuals receiving unemployment compensation are counted as employed.
B)understate unemployment because "discouraged workers" are not counted as unemployed.
C)include cyclical and structural unemployment, but not frictional unemployment.
D)overstate unemployment because workers who are involuntarily working part time are counted as being employed.

Accepted Answer

Discouraged workers who have given up looking for work are not counted as unemployed in the official unemployment statistics, thus underestimating the true level of unemployment.

Question 7

Waiting for employment and "searching for employment" are both types of:
A)cyclical unemployment.
B)hidden unemployment.
C)frictional unemployment.
D)structural unemployment.

Accepted Answer

waiting for employment and searching for employment both fall under frictional unemployment, which is the type of unemployment that occurs due to the time and effort it takes for workers to search for jobs that best fit their skills and preferences.

Question 8

The presence of discouraged workers:
A)increases the size of the labour force, but does not affect the unemployment rate.
B)reduces the size of the labour force, but does not affect the unemployment rate.
C)may cause the official unemployment rate to understate the amount of unemployment.
D)may cause the official unemployment rate to overstate the amount of unemployment.

Accepted Answer

Discouraged workers are those who have given up looking for work and are not actively seeking employment. As a result, they are not included in the official unemployment rate. This means that the official rate may underestimate the true amount of unemployment in the economy, as it does not take into account these discouraged workers. Therefore, the presence of discouraged workers may cause the official unemployment rate to understate the amount of unemployment.

Question 9

Part-time workers are counted as:
A)unemployed and therefore the official unemployment rate tends to overstate the level of unemployment.
B)unemployed and therefore the official unemployment rate tends to understate the level of unemployment.
C)fully employed and therefore the official unemployment rate tends to overstate the level of unemployment.
D)fully employed and therefore the official unemployment rate tends to understate the level of unemployment.

Accepted Answer

Part-time workers who want full-time work are considered as "underemployed" rather than "unemployed" in official statistics. As a result, the official unemployment rate tends to underestimate the level of unemployment by excluding these workers who are willing and able to work more hours but cannot find full-time employment. Therefore, D is the correct answer.

Question 10

The unemployment rate in an economy is 12 percent.The civilian labour force is 50 million.The number of employed workers in the economy is:
A)38 million.
B)40 million.
C)42 million.
D)44 million.

Accepted Answer

The answer of The unemployment rate in an economy is...

Question 11

The following information is about a hypothetical economy: Full-time employed = 80
Part-time employed = 25
Unemployed = 15
Discouraged workers = 5
Members of underground economy = 6
Consumer Price Index = 110
Refer to the above information.The unemployment rate is:
A)18.8 percent.
B)12.5 percent.
C)16.7 percent.
D)25 percent.

Accepted Answer

The unemployment rate is calculated as the number of unemployed divided by the labor force (full-time employed + part-time employed + unemployed), which is (15 / (80 + 25 + 15)) * 100 = 12.5 percent. Discouraged workers and members of the underground economy are not included in the labor force calculation.

Question 12

A nation has a population of 260 million people.Of these, 60 million are retired, in the military, in institutions, or under 15 years old.There are 188 million who are employed.What is the unemployment rate?
A)4 percent
B)6 percent
C)9 percent
D)27 percent

Accepted Answer

The total population is 260 million.
The number of people who are retired, in the military, in institutions, or under 15 years old is 60 million.
Therefore, the number of people who are eligible for employment is 260 million - 60 million = 200 million.
Out of the 200 million eligible for employment, 188 million are employed.
The number of people who are unemployed is 200 million - 188 million = 12 million.
To find the unemployment rate, we need to divide the number of unemployed by the total eligible for employment:
Unemployment rate = (12 million / 200 million) x 100% = 6%.
Therefore, the answer is B) 6 percent.

Question 13

Suppose there are 10 million part-time workers and 90 million full-time workers in an economy.Five million of the part-time workers switch to full-time work.We can conclude that:
A)the official unemployment rate will fall.
B)the official unemployment rate will rise.
C)the official unemployment rate will remain unchanged.
D)the size of the labour force will increase.

Accepted Answer

The switch of 5 million part-time workers to full-time work will increase the number of employed individuals, but it will also increase the size of the labor force, as more people will be actively seeking work. As a result, the unemployment rate (which is calculated as the number of unemployed individuals divided by the labor force) will remain unchanged.

Question 14

The total population of an economy is 175 million, the labour force is 125 million, and the number of unemployed is 8 million.The unemployment rate for this economy is:
A)4.6 percent.
B)5.8 percent.
C)6.4 percent.
D)7.8 percent.

Accepted Answer

The formula to calculate the unemployment rate is: 
Unemployment Rate = (Number of Unemployed / Labour Force) x 100%
Using the information given,
Unemployment Rate = (8 million / 125 million) x 100%
Unemployment Rate = 6.4%
Therefore, the unemployment rate for this economy is 6.4 percent, which is option C.

Question 15

The following information is about a hypothetical economy: Full-time employed = 80
Part-time employed = 25
Unemployed = 15
Discouraged workers = 5
Members of underground economy = 6
Consumer Price Index = 110
Refer to the above information.If 6 members of the labour force are presently counted as part of the unemployed when in fact they are employed, the official unemployment rate is overstated by:
A)0 percentage points.
B)2 percentage points.
C)7.5 percentage points.
D)6 percentage points.

Accepted Answer

The official unemployment rate is calculated as the number of unemployed divided by the total labor force. The total labor force is the sum of the full-time employed, part-time employed, unemployed, discouraged workers, and members of the underground economy. In this case, the total labor force is 80 + 25 + 15 + 5 + 6 = 131. The official unemployment rate is therefore 15 / 131 = 0.1145, or 11.45%. If 6 members of the labor force are presently counted as part of the unemployed when in fact they are employed, the true number of unemployed is 15 - 6 = 9. The true unemployment rate is therefore 9 / 131 = 0.0687, or 6.87%. The official unemployment rate is therefore overstated by 11.45% - 6.87% = 4.58 percentage points.

Question 16

Anne Kasperson works in her own home as a full-time caretaker and homemaker.Officially, she is:
A)unemployed.
B)employed.
C)not in the labour force.
D)in the labour force.

Accepted Answer

Anne Kasperson is not in the labour force because she is not actively seeking employment and is not being paid for her work as a full-time caretaker and homemaker.

Question 17

Kimberly voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree.With degree in hand she is now searching for a position in management.Kimberly presently is:
A)cyclically unemployed.
B)structurally unemployed.
C)frictionally unemployed.
D)not a member of the labour force.

Accepted Answer

Kimberly is in a transition period between leaving her previous job and finding a new one in management. This type of unemployment is referred to as frictional unemployment, which indicates that the individual is unemployed due to the time it takes to search for a suitable job.

Question 18

Working as an elevator operator used to be a common job in the workforce four decades ago, but today few jobs remain.The unemployment created by introduction of automatic elevators would be considered:
A)wait.
B)cyclical.
C)frictional.
D)structural.

Accepted Answer

Structural unemployment occurs when there is a mismatch between the skills and qualifications of workers and the available jobs in the labor market due to changes in technology, economic restructuring, or globalization. The introduction of automatic elevators led to a decrease in demand for elevator operators, which is an example of structural unemployment.

Question 19

The unemployment rate in an economy is 7.5 percent.The total population of the economy is 250 million and the size of the civilian labour force is 180 million.The number of employed workers in this economy is:
A)13.5 million.
B)15.7 million.
C)166.5 million.
D)174.6 million.

Accepted Answer

The unemployment rate is the percentage of the labor force that is unemployed. With a 7.5% unemployment rate and a labor force of 180 million, the number of unemployed is 13.5 million (0.075 * 180 million). Therefore, the number of employed workers is 180 million - 13.5 million = 166.5 million.

Question 20

A college or university graduate using the summer following graduation to search for a job would best be classified as:
A)not officially a member of the labour force.
B)a part of structural unemployment.
C)a part of cyclical unemployment.
D)a part of frictional unemployment.

Accepted Answer

The individual is actively searching for a job but has not yet found one, which falls under the category of frictional unemployment.

Quiz 9: B: Business Cycles, Unemployment, and Inflation

A nation has a population of 300 million people.Of these, 80 million are retired, in the military, in institutions, or under 15 years old.There are 210 million who are employed.What is the unemployment rate?

In an economy, 35 million workers are employed out of a labour force of 50 million and a total population of 70 million.The unemployment rate is:

Suppose there are 5 million unemployed workers seeking jobs.After a period of time, 1 million of them become discouraged over their job prospects and cease to look for work.As a result of this, the official unemployment rate would:

The best example of a "frictionally unemployed" worker is one who:

A headline reads: "Steel industry suffers slump as import competition increases and unemployment rises." This type of unemployment can best be characterized in economic terms as:

Official unemployment statistics:

Waiting for employment and "searching for employment" are both types of:

The presence of discouraged workers:

Part-time workers are counted as:

The unemployment rate in an economy is 12 percent.The civilian labour force is 50 million.The number of employed workers in the economy is:

The following information is about a hypothetical economy: Full-time employed = 80 Part-time employed = 25 Unemployed = 15 Discouraged workers = 5 Members of underground economy = 6 Consumer Price Index = 110 Refer to the above information.The unemployment rate is:

A nation has a population of 260 million people.Of these, 60 million are retired, in the military, in institutions, or under 15 years old.There are 188 million who are employed.What is the unemployment rate?

Suppose there are 10 million part-time workers and 90 million full-time workers in an economy.Five million of the part-time workers switch to full-time work.We can conclude that:

The total population of an economy is 175 million, the labour force is 125 million, and the number of unemployed is 8 million.The unemployment rate for this economy is:

Anne Kasperson works in her own home as a full-time caretaker and homemaker.Officially, she is:

Kimberly voluntarily quit her job as an insurance agent to return to school full-time to earn an MBA degree.With degree in hand she is now searching for a position in management.Kimberly presently is:

Working as an elevator operator used to be a common job in the workforce four decades ago, but today few jobs remain.The unemployment created by introduction of automatic elevators would be considered:

The unemployment rate in an economy is 7.5 percent.The total population of the economy is 250 million and the size of the civilian labour force is 180 million.The number of employed workers in this economy is:

A college or university graduate using the summer following graduation to search for a job would best be classified as: