Chapter 6: Unemployment

If an individual who worked as a server is now unemployed because the restaurant went out of business, the individual's reason for unemployment is best classified as:

job loser

By not counting discouraged workers as unemployed, the government's official unemployment rate __________ (overstates/understates/accurately measures) the problem of unemployment

understates

The unemployment rate can be most accurately described as the number of people __________ divided by the labor force multiplied by 100.

unemployed

The portion of the labor force that is not working but is willing and able to work and actively seeking work is defined as __________ and the portion of labor force that is working part-time or full-time is defined as _________.

unemployed, employed

____________ is the inability of labor force participants to find jobs

unemployment

The official unemployment rate understates the problem of unemployment because it does not count which of the following as unemployed: A. Temporary workers B. Discouraged workers C. Seasonal workers D. Unemployed workers E. Those in the military

B

When GDP is decreasing, both unemployment rates and average duration of unemployment __________ (increase/decrease/stay the same)

increase

The formula used to determine the unemployment rate is:

(unemployed / labor force) x 100

According to recent estimates of Okun's Law, each additional __% change in unemployment translates into a __% change in real output, as opposed to the original formulation of the same law.

1, 2

Rank the most cited real costs of joblessness from the most cited to the least cited: (order them 1-5) (Ex: 2. c) A. Reduced spending on food B. Discontinued child or elder care C. Interrupted education D. Increased family stress E. Postponed medical care

1. D 2. E 3. A 4. B 5. C

If a person is not employed but is actively seeking a job, he or she is counted as: (check all that apply) A. In the labor force B. Unemployed C. Out of the labor force D. Employed E. A nonparticipant

A, B

Labor force growth is caused by: (check all that apply) A. Population increases B. Immigration C. Unemployment D. Availability of more jobs

A, B

Which of the following could be considered a human cost of unemployment? A. Losses in income B. Severe psychological costs to the job loser C. Decreased confidence levels D. Higher dropout rate in schools

A, B, C

Labor force growth: (check all that apply) A. Enables us to produce more output each year B. Always results in less unemployment C. Requires the creation of more jobs D. Expands the production possibilities curve

A, C, D

Those who are working are defined as _________ and those who are not working but actively seeking work are defined as _________.

employed, unemployed