1. If some home-makers re-enter the labor force and start looking for work;

(a) what happens to the size of labor force? ["increases", "decreases", "remains unchanged"]

(b) what happens to the work-eligible population? ["increases", "decreases", "remains unchanged"]

2. For each of the following situations, classify whether the person is now either structurally unemployed frictionally unemployed cyclically unemployed discouraged workers underemployed

Group of answer choices

Tim has been looking for jobs for 2 years. He eventually gave up.

[ Choose ] underemployed cyclically unemployed frictionally unemployed structurally unemployed discouraged workers

Megan had a store selling goat cheese. However, people changed their tastes and stopped buying goat cheese. Megan closed down her store and started looking for a job.

[ Choose ] underemployed cyclically unemployed frictionally unemployed structurally unemployed discouraged workers

Sam has just graduated from a college. He has multiple job offers but he does not plan to take any of them. Sam is looking for a better job.

[ Choose ] underemployed cyclically unemployed frictionally unemployed structurally unemployed discouraged workers

John works 3 hours a day. He wants to work full time to save more money for buying a home.

[ Choose ] underemployed cyclically unemployed frictionally unemployed structurally unemployed discouraged workers

Linda was laid off due to a bad recession. She is now looking for a job.

[ Choose ] underemployed cyclically unemployed frictionally unemployed structurally unemployed discouraged workers

3. For each of the following situations, classify whether the person is now either employed; unemployed not in the labor force but work eligible not work eligible

Group of answer choices

Randall serves in the military.

[ Choose ] not work eligible not in the labor force but work eligible unemployed employed

Megan is working at a restaurant just 2 days a week. She does not want to work more as she is also studying at North Seattle College.

[ Choose ] not work eligible not in the labor force but work eligible unemployed employed

Dave lost his job at a toy manufacturing factory. Since then, he is travelling to find his purpose of life.

[ Choose ] not work eligible not in the labor force but work eligible unemployed employed

Mary has an online business selling hand-made necklaces.

[ Choose ] not work eligible not in the labor force but work eligible unemployed employed

4. Is it possible that the labor force participation rate is falling when the economy is growing? Explain.

Group of answer choices

No. When the economy is growing, there are fewer people in the labor force and the work eligible population increases. The labor force participation rate rises.

No. When the economy is growing, there are more discouraged workers and the labor force participation rate rises.

Yes. When the economy is growing, there are more people employed and the labor force participation rate falls.

Yes. An economic growth may lead to creative destructions. The workers in the industries affected may then leave the labor force, and the labor force participation rate falls.

Examine the following statistics about the economy and answer questions 8 - 10.

Number of unemployed: 15 million Size of labor force: 180 million Work-eligible population: 250 million

8. Calculate the unemployment rate (Round your answer to the nearest first decimal place.) Answer: The unemployment rate = _____________ %

9. Calculate the labor force participation rate. Answer: The labor force participation rate = _______ %

10. Given that the natural rate of unemployment is 5%, (a) is the economy in a recession or an expansion? [ Select ] ["Recession", "Expansion"] (b) is the actual real GDP above or below the full-employment output? [ Select ] ["above", "below"]