Question 1

What effect will including discouraged workers have on the unemployment rate?

Accepted Answer

Including discouraged workers in the labor force would increase the number of unemployed individuals, thus raising the unemployment rate. This is because discouraged workers are not counted as unemployed in the official calculation of the unemployment rate, but they are still individuals who are not actively working and looking for work. Therefore, including them in the calculation would increase the numerator of the unemployment rate equation (number of unemployed individuals) while keeping the denominator (total labor force) roughly the same, leading to an increase in the unemployment rate.

Question 2

Suppose there are 81.0 million people not in the labor force, 154.0 million in the civilian labor force, and 140.9 million employed.Based on these numbers, how many people are counted as unemployed?

Accepted Answer

The number of unemployed people is calculated by subtracting the number of employed people from the total civilian labor force. Therefore, 154.0 million (civilian labor force) - 140.9 million (employed) = 13.1 million unemployed.

Question 3

Workers at a car-manufacturing plant in Flint, Michigan are laid off because the economy is weak and GM cars aren't selling well.GM isn't sure when the plant will reopen.What type of unemployment best describes the workers' situation?

Accepted Answer

The situation described in the scenario is a classic example of cyclical unemployment, which occurs when there is a downturn in the business cycle and demand for goods and services decreases. In this case, the weak economy and poor sales of GM cars have led to a decrease in demand for the products made at the Flint plant, which has resulted in the layoff of workers.

Question 4

Workers at a car-manufacturing plant are replaced by automated machinery.What type of unemployment best describes the workers' situation?

Accepted Answer

The replacement of workers by automated machinery is an example of structural unemployment. This type of unemployment occurs when there is a mismatch between the skills and abilities of the available workers and the jobs that are available in the market. In this case, the workers who were replaced may not have the necessary skills to operate the new machinery, leading to their job loss.

Question 5

What two numbers do you need to compute the unemployment rate?

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed persons by the total number of employed and unemployed persons in the labor force. Therefore, the two numbers needed are the number of employed persons and the number of unemployed persons.

Question 6

Keynesians are most likely to:

Accepted Answer

Keynesians typically believe that unemployment is a significant problem, and therefore include discouraged workers in their calculation of the unemployment rate to give a more accurate picture of the level of joblessness in the economy.

Question 7

Suppose there are 81.0 million people not in the labor force, 154.0 million in the civilian labor force, and 140.9 million employed.Based on these numbers, what is the unemployment rate?

Accepted Answer

The answer of Suppose there are 81.0 million people not...

Question 8

Which of the following is associated with an increase in potential output?

Accepted Answer

A decrease in the target rate of unemployment (i.e. a lower unemployment rate) is associated with an increase in potential output because it means more workers are employed and productive, thus increasing the overall output of the economy. This relationship is known as the "output gap."

Question 9

When people stop looking for work, because they feel they didn't have a chance of finding on, they're called:

Accepted Answer

When people stop looking for work because they believe they won't find it, they're known as discouraged workers. This means that they are no longer counted as unemployed because they're not actively seeking employment.

Question 10

The target rate of unemployment is defined as the:

Accepted Answer

The target rate of unemployment is the lowest sustainable rate of unemployment achievable under existing conditions. This means that the economy is operating at its potential level of output with full employment, but without any inflationary pressures. The target rate of unemployment is achieved when there is only frictional and voluntary unemployment, but no cyclical or structural unemployment. Eliminating the business cycle is not the goal of the target rate of unemployment.

Question 11

Frictional unemployment:

Accepted Answer

Frictional unemployment refers to the temporary unemployment that arises from people entering the labor force and from people changing jobs. This type of unemployment is considered to be a natural part of a healthy labor market, as it reflects the time it takes for workers to find new jobs or for employers to find qualified workers.

Question 12

The unemployment that occurs when people first enter the labor force or when they are in the process of changing jobs, is called:

Accepted Answer

Frictional unemployment refers to the temporary unemployment that people experience when they are in the process of transitioning from one job to another, or when they are just entering the labor force. This type of unemployment is considered to be a natural part of a healthy labor market, as it allows workers to find jobs that are better suited to their skills and preferences.

Question 13

The number of people over age 16 in an economy willing and able to work, is known as the:

Accepted Answer

The labor force is defined as the number of people over the age of 16 who are willing and able to work.

Question 14

Mexico can produce vine-ripened tomatoes at a lower opportunity cost than firms in the United States.Through trade negotiations, the United States lifted quotas limiting the import of tomatoes from Mexico.Some firms in Florida, in the face of this new competition, had to close their farms and their workers lost their jobs.Many of the workers could not find new jobs right away.What type of unemployment describes the workers' situation?

Accepted Answer

The situation described is an example of structural unemployment, which occurs when changes in the economy (such as technological advancements or international trade agreements) result in a mismatch between the skills or location of workers and the available jobs. In this case, the elimination of tomato farming jobs in Florida due to competition with Mexico created a situation where workers were unable to find new jobs in their field immediately, resulting in unemployment.

Question 15

The total labor force is 100,000 out of a possible working age population of 160 ,000.The total number of unemployed is 8
,000.What is the unemployment rate?

Accepted Answer

The unemployment rate is calculated as the number of unemployed individuals divided by the labor force, then multiplied by 100 to convert it to a percentage. In this case, it's (8,000 / 100,000) * 100 = 8 percent.

Question 16

Classical economists contend that official measures of unemployment:

Accepted Answer

The answer of Classical economists contend that official measures of...

Quiz 24: Economic Growth, Business Cycles, and Unemployment