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Unemployment Questions and Answers
1. Which of the following is included in the labor force?
A. A student who is still in school but not working or looking for work.
B. A part-time store clerk who is looking for another job.
C. A person who voluntarily runs a charity.
D. A person who spends the entire day taking care of his or her own young children at home.
Anyone who is 16 years of age or older, is not in the military or prison, is not a patient in a hospital, is actively
searching for a job, and has a job is considered to be in the labor force.
2. Individuals who are working part-time while seeking full-time employment are classified as
A. Unemployed.
B. Underemployed.
C. Discouraged workers.
D. Phantom unemployed.
This might be someone who is teaching part-time but seeking a full-time teaching job while working the part-time
job.
3. The type of unemployment that increases most when teenagers look for temporary summer jobs is
A. Frictional unemployment.
B. Structural unemployment.
C. Seasonal unemployment.
D. Cyclical unemployment.
Seasonal unemployment arises when an industry needs less labor because the work is seasonal.
4. Nancy returns to school to study medicine. After graduating, she spends six months looking for a job. During
this period, she is considered
A. Cyclically unemployed.
B. Structurally unemployed.
C. Frictionally unemployed.
D. Seasonally unemployed.
Frictionally unemployed workers do not usually stay unemployed because they have skills that are needed by
employers, but it takes some time to find the best match for the worker and the employer.
5. Structural unemployment occurs when
A. Workers do not have the skills required to fill the vacant positions in the job market.
B. Firms fail in the normal course of business activity.
C. An industry experiences a seasonal downturn.
D. There is inadequate demand for labor.
Structural unemployment can persist for a long time because the skills possessed by the unemployed are no longer
in demand.
6. When people over 16 years old start looking for jobs, the
A. Unemployment rate increases and the labor force increases.
B. Unemployment rate decreases and the labor force decreases.
C. Unemployment rate increases and the labor force decreases.
D. Unemployment rate decreases and the labor force increases.
When people start looking for work, the "looking for work" portions of both the numerator and denominator get
larger. Example: 3/(3 + 6) = 33.3%; 4/(4 + 6) = 40 %.
7. What is the likely consequence of an unemployment rate falling below the rate at which "full employment" is
achieved?
A. The threat of recession.
B. Increased inflationary pressures.
C. An increase in discouraged workers.
D. None of the choices are correct.
Prices tend to increase when scarce resources are sought after by many.
8.
What was the unemployment rate in Nationland in 1999?
A. 7.6 percent.
B. 7.1 percent.
C. 5.0 percent.
D. 65.0 percent.
The unemployment rate is simply the number of people who are unemployed divided by the labor force: 5/(65 +
5).
9.
What was the labor force participation rate in Nationland in 2000?
A. 67.0 percent.
B. 65.0 percent.
C. 72.0 percent.
D. 72.7 percent.
The labor force participation rate is simply the labor force divided by the population: (10 + 70)/110.
10.
If discouraged workers are included in the labor force, what was the unemployment rate for 1999?
A. 3.0 percent.
B. 9.7 percent.
C. 10.8 percent.
D. 2.8 percent.
By including discouraged workers, this new unemployment figure may give a better estimate of the actual
unemployment rate: (2 + 5)/(2 + 5 + 65).
11.
If discouraged workers are included in the labor force, what was the unemployment rate for 2000?
A. 18.6 percent.
B. 3.8 percent.
C. 4.3 percent.
D. 15.7 percent.
By including discouraged workers, this new unemployment figure may give a better estimate of the actual
unemployment rate: (3 + 10)/(3 + 10 + 70).