Unemployment

Question 1

Which of the following statements reflects a valid criticism of the unemployment rate as it is measured by the U.S. Bureau of Labor Statistics?

AA drop in the unemployment rate can be misleading if many people have left the labor force.

BDiscouraged workers are included in the official unemployment rate but should not be.

CCounting people younger than 16 as unemployed artificially inflates the unemployment rate.

DFrictional unemployment is excluded from the unemployment rate but should not be.

ECounting full-time students as unemployed makes the unemployment rate misleadingly high.

Question 2

If an economy has a structural unemployment rate of 1 percent, a frictional unemployment rate of 4 percent, and an actual rate of unemployment of 12 percent, what must be its cyclical unemployment rate?

A5 percent

B7 percent

C8 percent

D11 percent

E17 percent

Question 3

If the unemployment rate is 12 percent, which of the following must be true?

AFor every 100 people in the country, 12 are seeking work.

BTwelve percent of the total population are discouraged workers.

CTwelve percent of the population have stopped pursuing employment.

DTwelve percent of the labor force is unemployed.

EThe labor force participation rate is 88 percent.

Question 4

Which of the following would directly decrease the labor force participation rate?

AMore parents decide to balance part-time work and raising children.

BMany workers lose their jobs and start searching for new ones.

CPeople begin to increasingly put off retirement.

DAn increasing number of people choose to retire early.

EMany people come out of full retirement to pursue part-time work.

Question 5

Total Population 16 and Older 100 million Workers Employed 64.4 million Structurally Unemployed 1.6 million Cyclically Unemployed 1 million Frictionally Unemployed 3 million