Question 1

The unemployment rate equals the number of persons:

Accepted Answer

The unemployment rate is calculated as the number of unemployed individuals who are actively seeking work, divided by the total number of individuals in the civilian labor force, which includes both employed and unemployed individuals who are actively seeking work. Therefore, option B is the correct choice. Option A divides the number of unemployed individuals by the number of employed individuals, which does not provide an accurate representation of the unemployment rate. Option C divides the number of unemployed individuals by the total population age 16 and over, which includes individuals who are not in the labor force, such as retirees and students. Option D divides the number of individuals not working by the total population age 16 and over, which also includes individuals who are not in the labor force.

Question 2

Which of the following statements would come from someone classified as unemployed?

Accepted Answer

To be classified as unemployed, a person must be without a job and actively seeking work. Statement E describes someone who is not working and actively looking for a job, which fits the definition of unemployment.

Question 3

The unemployment rate will increase whenever there is a(n):

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed persons by the total labor force (employed + unemployed). Therefore, an increase in the number of unemployed persons relative to the size of the labor force will result in an increase in the unemployment rate. The other choices either refer to changes in the absolute number of employed or unemployed persons, or changes in the size of the labor force without regard to the number of unemployed persons.

Question 4

If a sizable number of workers were switched from full-time to half-time employment, then the official unemployment rate would:

Accepted Answer

The official unemployment rate measures the percentage of the labor force that is jobless and actively seeking employment. Switching workers from full-time to half-time does not change their status from employed to unemployed; therefore, the official unemployment rate would remain unchanged.

Question 5

Suppose u = those adults who are unemployed and seeking work; e = those adults who are employed; and NLF = those adults not in the labor force. Which expression would equal the BLS definition of the unemployment rate?

Accepted Answer

The unemployment rate is calculated as the number of unemployed individuals (u) divided by the total labor force, which is the sum of employed (e) and unemployed (u) individuals. Thus, the correct expression is u / (u + e).

Question 6

A criticism of the unemployment rate is that:

Accepted Answer

The unemployment rate does not account for part-time workers who wish to work full-time, thus considering them fully employed.

Question 7

Suppose the official unemployment rate is 10 percent. We can conclude without question that:

Accepted Answer

The official unemployment rate is a percentage of the total civilian labor force who are currently unemployed and actively seeking employment. It does not indicate if they have been out of work for the entire year or for a portion of it. Therefore, option B is the correct answer as it correctly states that one out of every 10 people in the civilian labor force is currently unemployed.

Question 8

Which of the following groups of people are counted as employed?

Accepted Answer

All of the options describe situations where individuals are considered employed according to standard labor force definitions.

Question 9

The unemployment rate will decrease whenever there is a(n):

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed individuals by the total labor force. Therefore, a decrease in the number of unemployed individuals relative to the size of the labor force will lead to a decrease in the unemployment rate. The other choices either do not affect the unemployment rate or may actually lead to an increase in the unemployment rate.

Question 10

Which of the following is the correct formula for determining the civilian unemployment rate?

Accepted Answer

The civilian unemployment rate is determined by dividing the number of unemployed, working-age civilians seeking work by the number of civilians in the labor force, and then multiplying the result by 100 to express it as a percentage. Therefore, formula A [(the number of unemployed, working-age civilian seeking work)/(the number of civilian in the labor force)] x 100 is the correct formula for determining the civilian unemployment rate. Choice B is the formula for calculating GDP, choice C only provides the number of unemployed working-age civilians, and choice D is missing the division by the number of civilians in the labor force.

Question 11

Which of the following people would be officially counted as unemployed?

Accepted Answer

Only D qualifies as officially unemployed because they are jobless but actively looking for work. A works, B is not in the labor force, and C works without pay, so they are not considered unemployed by official labor market statistics.

Question 12

Exhibit 12-2  Unemployment categories  The unemployment rate for the economy in Exhibit 12-2 is:

Accepted Answer

The answer of Exhibit 12-2  Unemployment categories  The unemployment rate...

Question 13

Why might the official measure of civilian unemployment in the U.S. be an understatement of actual unemployment?

Accepted Answer

The official measure of civilian unemployment in the U.S. may be an understatement of actual unemployment because some workers become discouraged and no longer actively seek work, thus they are not counted in the labor force and are not officially classified as unemployed. Additionally, part-time employment is counted as being no different from full-time employment, even though many part-time workers would prefer to work full-time. Therefore, both a. and c. above are correct.

Question 14

An individual who is employed part time, but is looking for a full-time job is classified as:

Accepted Answer

The answer of An individual who is employed part time,...

Question 15

The unemployment rate is the percentage of the:

Accepted Answer

The unemployment rate is the percentage of the civilian labor force that is unemployed. It does not include those who are working part-time or those who are not in the labor force.

Question 16

The unemployment rate measures the percentage of:

Accepted Answer

The unemployment rate is calculated by dividing the number of individuals who are unemployed and actively seeking employment by the total number of individuals in the civilian labor force, which includes individuals who are working or actively seeking work. Therefore, choice A is the most accurate definition of the unemployment rate.

Question 17

Consider an economy made up of 100 people, 50 of whom hold jobs, 10 of whom are looking for work, and 15 of whom are retired. The unemployment rate is approximately:

Accepted Answer

The answer of Consider an economy made up of 100...

Question 18

One problem with the unemployment rate is that:

Accepted Answer

The answer of One problem with the unemployment rate is...

Question 19

Find the BLS's rate of unemployment from the following data: frictional unemployment = 150, structural unemployment = 200, cyclical unemployment = 225, discouraged workers = 25, underemployed workers = 75, fully employed workers = 850, total population = 2,000.

Accepted Answer

The answer of Find the BLS's rate of unemployment from...

Question 20

In a dynamic economy under ideal conditions:

Accepted Answer

A dynamic economy with job creation and destruction will naturally have some unemployment due to workers transitioning between jobs. This is referred to as frictional unemployment and is not a cause for concern. Options A, C, and D are incorrect as they imply that there is either no unemployment or that unemployment is influenced by factors other than job transitions.

Quiz 12: Business Cycles and Unemployment