Question 1

Measured unemployment includes discouraged workers.

Accepted Answer

False

Question 2

Suppose U = the number of adults who are unemployed; E = the number of adults who are employed; and NLF = the number of adults not in the labor force.Which expression would equal the labor force participation rate?
A) U/(U + E)
B) E/(U + E)
C) U/(U + E + NLF)
D) E/(U + E + NLF)
E) (U + E)/(U + E + NLF)

Accepted Answer

Labor force participation rate measures the percentage of the working-age population that is in the labor force. The labor force consists of employed and unemployed individuals. Therefore, the labor force participation rate can be calculated by dividing the total number of people in the labor force (employed plus unemployed) by the total working-age population (labor force plus those not in the labor force). This is expressed as (U+E)/(U+E+NLF), which is option E.

Question 3

Which of the following is not considered a cost of unemployment?
A) loss of self-respect by those who are unemployed
B) waste of the economy's resources
C) negative psychological effects on those who have lost their jobs
D) higher inflation rates
E) loss of income by those who are unemployed

Accepted Answer

Higher inflation rates are not considered a cost of unemployment, but rather a separate macroeconomic issue. The other options are all considered costs of unemployment.

Question 4

Which of the following is not a cost of unemployment?
A) Unemployed individuals suffer a loss of income.
B) Unemployed individuals are more likely to have emotional or psychological problems.
C) Unemployed individuals can lose their job skills over time.
D) Unemployment causes production to decrease from what it could be.
E) The opportunity cost of unemployment is a higher inflation rate.

Accepted Answer

The opportunity cost of unemployment is not a higher inflation rate, as inflation is not a direct consequence of unemployment. It is rather a separate economic phenomenon that can be affected by factors such as government policies, changes in the money supply, and supply and demand conditions in markets. The other options are all recognized costs of unemployment, including income loss, psychological distress, skill atrophy, and reduced production levels.

Question 5

The unemployment rate rises any time there is an increase in the number of unemployed.

Accepted Answer

The answer of The unemployment rate rises any time there...

Question 6

The unemployment rate is the
A) percentage of people in the economy who do not hold jobs
B) percentage of the labor force that does not have a job
C) number of people in the economy who have given up looking for employment
D) number of people in the labor force without jobs
E) ratio of unemployed to employed high school graduates in the economy

Accepted Answer

The unemployment rate is a measure of the percentage of the labor force that does not currently have a job. It is calculated by dividing the number of unemployed individuals in the labor force by the total number of individuals in the labor force, and multiplying by 100. Option A does not necessarily take into account those who are not in the labor force, such as students or retirees. Option C is incorrect because those who have given up looking for work are not considered part of the labor force and are not included in the unemployment rate calculation. Option D correctly mentions the labor force, but the unemployment rate is specifically concerned with the percentage of that labor force that is without a job, not just the raw number. Option E is not a recognized measure of unemployment.

Question 7

The unemployment rate will increase whenever there is a(n)
A) increase in the number of persons classified as unemployed
B) increase in the number of unemployed relative to the size of the labor force
C) increase in the size of the U.S.population and there is no change in the number of persons classified as employed
D) reduction in the size of the labor force
E) reduction in the size of the labor force while the number of unemployed decreases

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed people by the total labor force. Therefore, an increase in the number of unemployed relative to the size of the labor force will result in an increase in the unemployment rate. Option A only states an increase in the number of unemployed people, which may or may not increase the unemployment rate, depending on the labor force size. Options C and E mention changes in the population or labor force sizes, but do not provide enough information about the number of employed or unemployed people to determine the impact on the unemployment rate. Option D states a reduction in the labor force size, which would reduce the denominator of the unemployment rate calculation and therefore potentially decrease the unemployment rate.

Question 8

Consider an economy made up of 100 people,60 of whom hold jobs,10 of whom are looking for work,and 15 of whom are retired.The number counted as unemployed is
A) 10
B) 15
C) 40
D) 30
E) 90

Accepted Answer

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

Question 9

Discouraged workers are included in the labor force figures but not in unemployment figures.

Accepted Answer

Discouraged workers are those who have given up on looking for work and are no longer counted as unemployed because they are not currently seeking employment. Therefore, they are not included in either the labor force figures or unemployment figures.

Question 10

The labor force consists of all adults who are currently employed.

Accepted Answer

The labor force consists of all adults who are currently employed or actively seeking employment, therefore the correct statement should be "The labor force consists of all adults who are currently employed or actively seeking employment."

Question 11

Consider an economy with an adult population of 100,50 of whom hold jobs,10 of whom are looking for work,and 15 of whom are retired.The labor force participation rate is
A) 100 percent
B) 60 percent
C) 50 percent
D) 40 percent
E) 10 percent

Accepted Answer

The labor force is the sum of employed and unemployed individuals. The employed individuals are 50, and the unemployed individuals looking for work are 10, for a total labor force of 60 (50+10). The adult population is 100, so the labor force participation rate is 60/100 = 60%.

Question 12

Which of the following people would be counted in the labor force?
A) Chou,who lost his job and last looked for work three months ago
B) Stephanie,who holds a Ph.D.in history,but can only find part-time employment at a fast-food restaurant
C) Jordan,who would like to work as a stockbroker but is now a househusband
D) Steffan,who thinks he could easily earn $100,000 per year,despite the opinion of the psychiatrist at the state hospital where he is a patient
E) Monique,age 90,who is enjoying her retirement in Montana

Accepted Answer

The answer of Which of the following people would be...

Question 13

People who are not currently employed,but say they want a job,are counted as unemployed only if they
A) have previously held a job
B) are actively seeking employment
C) are willing to accept a reasonable offer
D) are between 16 and 65 years of age
E) are willing to accept any offer of employment

Accepted Answer

To be counted as unemployed, a person must be actively seeking employment. This means they are taking specific steps to find a job, such as submitting resumes, attending job fairs, or networking with potential employers. Simply expressing a desire for employment is not enough to be considered unemployed.

Question 14

Consider an economy made up of 100 people,60 of whom hold jobs,10 of whom are looking for work,and 15 of whom are retired.The number of people in the labor force is
A) 30
B) 60
C) 85
D) 90
E) 70

Accepted Answer

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

Question 15

A major cost of unemployment is lost production.

Accepted Answer

Unemployment means that individuals who could be producing goods and services are not. This results in a loss of potential output and a decrease in overall economic productivity. Therefore, unemployment results in lost production.

Question 16

A discouraged worker is one who
A) is underqualified for his current job
B) dislikes his current job but is afraid to quit
C) drops out of the labor force because he cannot find a job
D) quits his job because the possibility of advancement was very low
E) is overqualified for his current job

Accepted Answer

A discouraged worker is someone who has given up looking for work because they believe they cannot find a job. Therefore, choice C - drops out of the labor force because he cannot find a job - is the best choice.

Question 17

Which of the following people would be counted as unemployed?
A) a retired naval officer
B) a full-time student in high school
C) a father of preschool children who does not want to work
D) an inner-city teenager who has given up looking for work after a year of trying
E) a downhill ski instructor who looks for work during the summer

Accepted Answer

The answer of Which of the following people would be...

Question 18

Suppose U = the number of adults who are unemployed; E = the number of adults who are employed; and NLF = the number of adults not in the labor force.Which expression would equal the unemployment rate?
A) U/(E + NLF)
B) U/E
C) U/(U + E)
D) U/(U+ NLF)
E) U/(U + E - NLF)

Accepted Answer

The answer of Suppose U = the number of adults...

Question 19

The labor force consists of all
A) the people in the economy who are not retired
B) people in the economy over 16 years of age
C) the adults in the economy between 18 and 65 years old who are able to work
D) the noninstitutionalized population over 16 in the economy who hold jobs or are looking for them
E) the citizens in the economy who are graduates of high school

Accepted Answer

The labor force includes all individuals in the noninstitutionalized population over 16 who hold jobs or are seeking employment. Retirement status, age range, education level, and citizenship status are not factors in determining the labor force.

Question 20

Which of the following are classified as "discouraged workers"?
A) all those between 16 and 65 who are neither disabled nor in an institution and are also neither employed nor seeking employment
B) labor force members who have chosen early retirement because they dislike their work or think the pay is too low
C) members of the noninstitutional population who say they want to be employed but are not searching for a job
D) members of the labor force who are looking for a job but cannot find one
E) anyone in the population who is not working

Accepted Answer

Discouraged workers are those who want a job but have given up looking for one. Choice A includes all those who are not employed or seeking employment, which includes discouraged workers but also others such as students and retirees. Choice B describes individuals who have voluntarily left the labor force and are not considered discouraged workers. Choice D describes unemployed individuals who are actively seeking employment, which is not the definition of a discouraged worker. Choice E is too broad and includes individuals who may not be interested in or able to work, as well as discouraged workers.

Quiz 8: Unemployment and Inflation

Measured unemployment includes discouraged workers.

Suppose U = the number of adults who are unemployed; E = the number of adults who are employed; and NLF = the number of adults not in the labor force.Which expression would equal the labor force participation rate?

Which of the following is not considered a cost of unemployment?

Which of the following is not a cost of unemployment?

The unemployment rate rises any time there is an increase in the number of unemployed.

The unemployment rate is the

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

Consider an economy made up of 100 people,60 of whom hold jobs,10 of whom are looking for work,and 15 of whom are retired.The number counted as unemployed is

Discouraged workers are included in the labor force figures but not in unemployment figures.

The labor force consists of all adults who are currently employed.

Consider an economy with an adult population of 100,50 of whom hold jobs,10 of whom are looking for work,and 15 of whom are retired.The labor force participation rate is

Which of the following people would be counted in the labor force?

People who are not currently employed,but say they want a job,are counted as unemployed only if they

Consider an economy made up of 100 people,60 of whom hold jobs,10 of whom are looking for work,and 15 of whom are retired.The number of people in the labor force is

A major cost of unemployment is lost production.

A discouraged worker is one who

Which of the following people would be counted as unemployed?

Suppose U = the number of adults who are unemployed; E = the number of adults who are employed; and NLF = the number of adults not in the labor force.Which expression would equal the unemployment rate?

The labor force consists of all

Which of the following are classified as "discouraged workers"?