Question 1

Suppose initially that the working-age population is 220 million, the labor force is 150 million, and the official U-3 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 U-3 unemployment rate?
A) 6.25 percent
B) 6.7 percent
C) 9.7 percent
D) 8.7 percent

Accepted Answer

The answer of Suppose initially that the working-age population is...

Question 2

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) 100/1500.
B) 100/1600.
C) 100/2000.
D) 1500/2000.

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed individuals by the labor force (unemployed + employed). So, in this case, the unemployment rate would be 100/1600.

Question 3

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

Accepted Answer

The unemployment rate is calculated as the number of unemployed persons divided by the labor force, then multiplied by 100 to get a percentage. In Tiny Town, there are 80 people in the labor force and 70 are employed, so 10 are unemployed. Therefore, the unemployment rate is (10/80) × 100.

Question 4

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) 6.7 percent
C) 8 percent
D) 25 percent

Accepted Answer

Unemployment rate = (number of unemployed / labor force) * 100
Labor force = employed + unemployed = 23 million + 2 million = 25 million
Number of part-time workers who would prefer full-time work are not counted in the unemployment rate calculation because they are employed, but underemployed. 
Therefore, the unemployment rate = (2 million / 25 million) * 100 = 8%.

Question 5

Suppose 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) 9 percent; 10 percent
B) 10 percent; 9 percent
C) 10 percent; 11 percent
D) 11 percent; 10 percent

Accepted Answer

Initially, the unemployment rate is 10/100 = 10%. After 10 people drop out, the labor force is 90, with 10 unemployed, making the rate 10/90 = 11.11%, which rounds to 11%.

Question 6

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) 5/100 × 100.
B) 5/80 × 100.
C) 5/75 × 100.
D) There is not enough information provided to calculate the unemployment rate.

Accepted Answer

The unemployment rate is the number of unemployed individuals divided by the total labor force, or (5/75) × 100.

Question 7

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

Accepted Answer

The unemployment rate is calculated by dividing the number of unemployed persons by the number of people in the labor force. Therefore, the necessary pieces of information are the number of unemployed persons (I) and the number of people in the labor force (III). The population (II) and working age population (IV) may be useful for additional analysis, but they are not necessary for calculating the unemployment rate.

Question 8

In September 2014, the official U-3 unemployment rate dropped from 6.1 percent to 5.9 percent. This change could have been caused by
A) unemployed workers giving up looking for a job.
B) part-time workers getting a full-time job.
C) full-time workers becoming part-time workers.
D) workers who had previously given up looking for a job starting to look again.

Accepted Answer

The U-3 unemployment rate measures the percentage of the labor force that is unemployed and actively seeking employment. If unemployed workers stop looking for a job, they are no longer counted in the labor force, which can cause the unemployment rate to drop, as seen in this scenario.

Question 9

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

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. The number of unemployed people is the labor force minus the number of people employed, which is 150 million - 130 million = 20 million. Therefore, the unemployment rate is (20 million / 150 million) * 100 = 13.3 percent.

Question 10

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

Accepted Answer

The labor force equals the number of employed plus the number of unemployed. Therefore, the number of unemployed people is 133.9 million - 126.7 million = 7.2 million. 
The unemployment rate is the number of unemployed people divided by the labor force times 100. 
Unemployment rate = (7.2 million / 133.9 million) x 100 = 5.4%

Question 11

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) 6.6 percent.
B) 10 percent.
C) 9.1 percent.
D) 7.1 percent.

Accepted Answer

Unemployment rate = (Number of unemployed workers / Labor force) x 100%
Labor force = Number of employed workers + Number of unemployed workers
Labor force = 1000 + 100 = 1100
Unemployment rate = (100/1100) x 100% = 9.1%

Question 12

Between September 2013 and September 2014 the number of discouraged workers decreased from 852,000 to 698,000. Assuming the change resulted from discouraged workers starting to make specific efforts to find a job again, this change creates
A) an increase to the U-3 unemployment rate.
B) a decrease to the U-3 unemployment rate.
C) no change to the U-3 unemployment rate.
D) a decrease in the labor force participation rate.

Accepted Answer

When discouraged workers start looking for work again, they are counted as unemployed if they don't find a job immediately. This increases the number of people counted in the labor force as unemployed, raising the U-3 unemployment rate.

Question 13

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) 10/70 × 100.
C) 10/80 × 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 14

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

Accepted Answer

The number of unemployed people is calculated as 10% of the labor force, which is 10% of 150 million = 15 million.

Question 15

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 official U-3 unemployment rate.
B) decreases the official U-3 unemployment rate.
C) does not change the official U-3 unemployment rate.
D) increases the official U-3 unemployment rate and the labor force participation rate.

Accepted Answer

When people drop out of the labor force because they are unable to find a job, they are no longer counted as unemployed in the official U-3 unemployment rate which only counts those who are actively seeking work. This decreases the official U-3 unemployment rate.

Question 16

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

Accepted Answer

The initial employed persons would be 100 million - 6 million = 94 million. During the next month, 300,000 people find jobs, so the new total employed would be 94 million + 300,000 = 94.3 million. Also, 200,000 people lost their jobs, which means the number of unemployed people would be 6.2 million. Thus, the new unemployment rate would be (6.2 million/(94.3 million + 6.2 million)) x 100 = 6.2 percent (rounded to one decimal place). Therefore, the correct answer is C, 94.1 million employed persons and 5.9 percent unemployment rate.

Question 17

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

Accepted Answer

The unemployment rate tends to rise during recessions as businesses lay off workers and people struggle to find new jobs. During economic expansions, the unemployment rate tends to fall as businesses hire more workers and more job opportunities become available.

Question 18

Between September 2013 and September 2014 the number of economic part-time workers decreased from 7.9 million to 7.1 million. Assuming the change resulted from economic part-time workers transitioning to full-time jobs, this change created
A) no change to the U-3 unemployment rate.
B) a decrease to the U-3 unemployment rate.
C) an increase to the U-3 unemployment rate.
D) an increase in the employment-to-population ratio.

Accepted Answer

The answer of Between September 2013 and September 2014 the...

Question 19

Which of the following decreases the official U-3 unemployment rate?
A) Workers leave the labor force.
B) More women enter the labor force and seek jobs.
C) Young people graduate from college and start to look for their first full-time job.
D) None of the above because they all increase or do not change the unemployment rate.

Accepted Answer

Workers leaving the labor force decrease the number of people counted as unemployed and therefore lower the official U-3 unemployment rate. Choices B and C both result in an increase in the labor force and would either increase or not change the unemployment rate.

Question 20

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

Accepted Answer

The unemployment rate measures the percentage of the labor force (people who are currently employed or actively looking for work) who are unable to find a job. Option A is incorrect because it does not consider those who are not actively looking for work. Option B is incorrect because it includes individuals who may not be seeking employment for various reasons. Option D is incorrect because it only considers full-time employment and ignores part-time or temporary work.

Quiz 5: Monitoring Jobs and Inflation

Suppose initially that the working-age population is 220 million, the labor force is 150 million, and the official U-3 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 U-3 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

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

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?

Suppose 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

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

In September 2014, the official U-3 unemployment rate dropped from 6.1 percent to 5.9 percent. This change could have been caused by

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?

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 ________.

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

Between September 2013 and September 2014 the number of discouraged workers decreased from 852,000 to 698,000. Assuming the change resulted from discouraged workers starting to make specific efforts to find a job again, this change creates

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 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

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

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 .

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

Between September 2013 and September 2014 the number of economic part-time workers decreased from 7.9 million to 7.1 million. Assuming the change resulted from economic part-time workers transitioning to full-time jobs, this change created

Which of the following decreases the official U-3 unemployment rate?

The unemployment rate measures the percentage of