Econ 102: Chapter 8

Which of the following is NOT considered to be in the labor force?

a person who is not working and who has not tried to find a job

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

unemployed workers giving up looking for a job.

Frictional unemployment is

unemployment associated with the changing of jobs in a changing economy.

Suppose the country of Quasiland experienced a decrease in real GDP and people were laid off from their jobs. The people would be considered part of

cyclical unemployment

Unemployment that is the result of recessions is called

cyclical unemployment

The three types of unemployment are

frictional, structural, cyclical

Catherine quit her job in order to look for a new one; therefore, she is best considered as

frictionally unemployed

The type of unemployment created by the normal rate of reentry and entry into the labor force is

frictionally unemployment

The natural unemployment rate

has been estimated to range between 4 percent and 6 percent in the United States in recent years.

The official U-3 unemployment rate

includes persons without a job who have made efforts in the last week to find a job.

From 1980 to 2000 the employment-to-population ratio generally ________ and from 2000 to 2015 the ratio generally ________.

increased; decreased

From 1980 to 2000 the labor force participation rate generally ________ and from 2000 to 2015 the rate generally ________.

increased; decreased

A discouraged worker ________ counted as officially unemployed and ________ counted as in the labor force.

is not; is not

If unemployment equals the natural unemployment rate, then there

is only frictional or structural unemployment.

The natural unemployment rate

is the unemployment rate at full employment.

Suppose that the unemployment rate equals 4.5 percent and that the natural unemployment rate is 5.5 percent. We can conclude that

the output gap is positive.

The unemployment rate is measured as

the percentage of people in the labor force who are unemployed.

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

the unemployment rate

Full employment occurs when

there is no cyclical unemployment

An individual who has stopped looking for a job but has looked in the past and still wants a job is referred to as

a marginally attached worker.

Suppose that the natural unemployment rate is 4.5 percent and the actual unemployment rate is 3.5 percent. Then cyclical unemployment is

-1 percent

Suppose the current unemployment rate is 5 percent, the labor force is 400 million people, the labor force participation rate is 80 percent and the working-age population is 500 million people. What number of people are unemployed?

20 million people

Category Number (millions) Discouraged workers 15 Unemployed workers 40 Employed workers 100 Population (16 years and over) 225 In the above table, the working age population is

225 million.

Component Number of people (millions) Under 16 50 Working full-time 90 Working part-time 30 Retired 40 Unemployed 5 Using the data in the above table, the unemployment rate is

4.0 percent

Category Number (millions) Discouraged workers 15 Unemployed workers 40 Employed workers 100 Population (16 years and over) 225 In the above table, the employment-to-population ratio is

44 percent.

If the population is 300 million, with 70 million under the age of 16 and institutionalized, another 70 million not in the labor force, 10 million unemployed, and 150 million employed, the employment-to-population rate is

65.2 percent

Component Number of people (millions) Total population 246 Working-age population 207 Labor force 139 Employed 133 Unemployed 6 Using the information in the above table, the labor force participation rate is

67.1 percent

In a country with a working-age population of 100 million, 70 million workers are employed and 5 million workers are unemployed. What is the labor force participation rate?

75 percent

Using the definition of unemployment, which of the following individuals would be unemployed?

All of these individuals are unemployed.

Person A This person has just graduated from high school and is working at a part-time job but wants a full-time job. Person B At the age of 45, this person was laid off from the automobile industry when new equipment was installed and the person did not have the skills necessary to use the equipment. This person now is searching to find a new job. Person C As a result of this person's spouse being transferred to a job in a new city, this person is looking for a new job. Person D This person just graduated from college and is looking for an engineering job. In the meantime, this person is working full-time waiting tables. The above table shows answers given by people interviewed in the Current Population Survey. Which people are structurally unemployed?

B and C

The natural unemployment rate I. occurs when only there is no cyclical unemployment present. II. is the unemployment rate when the economy is at potential GDP.

I and II

Bob inherits a large sum of money from his dead uncle's estate. Bob decides to retire young, so he quits his job and heads to the Bahamas. Bob is an example of

None of the above is correct

Full employment occurs

Only if the unemployment rate is equal to the natural rate of unemployment.

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

There is not enough information provided to calculate the unemployment rate.

From September 2013 to September 2014, the employment-to-population ratio increased from 58.6 percent to 59.0 percent. This change could have been the result of

a decrease in the working-age population.

An observer of the economy notices that over the past 12 months the unemployment rate has fallen from 7.0 percent to 6.5 percent. During the same time, the rate of growth in real GDP has been positive. From this information we might conclude that

an expansion is occurring in the economy.

The official U-3 unemployment rate includes the total number of people who

are available and looking for work but unable to find employment.

Structural unemployment is

associated with changes in technology that change required job skills.

Cyclical unemployment ________ during expansions and ________ during recessions.

decreases; increases

The percentage of people employed aged 16 years and older divided by the working-age population is known as the

employment-to-population ratio.

cyclical unemployment

fluctuates over the business cycle

Suppose that Matt quits a job with the XYZ Corporation in order to look for more rewarding employment. Matt is best be considered as

frictioanlly unemployed

When the economy is operating at full employment, the natural unemployment rate consists of only

frictional and structural unemployment.

The labor force participation rate shows the percentage of

non-institutionalized working-age people who are actually working or seeking employment.

Marginally attached workers fall into which of the following population categories?

not in the labor force

Suppose that the number of jobs in the fishing industry decreases but the number of jobs in the travel industry increases. Initially,

structual unemployment increases

Andrew just lost his job as a corkscrew operator since his company has found a machine to perform his work tasks. Andrew did not have the skills needed to operate the machine. Andrew has searched for a new job for 6 months and continues to search. Therefore, Andrew is considered to be

structually unemployed

In the 2000s, video recordings were made primarily on DVDs. However, in the 2010s streaming movies became increasingly popular, leading to a sharp decline in DVDs. As a result, many people who manufactured DVDs lost their jobs and didn't have the skills necessary to work in jobs required to stream movies. This occurrence is best consider an example of

structural unemployment

The labor force is defined as the

sum of employed and unemployed people

The labor force participation rate is percentage of the ________ who are in the labor force.

working-age population