Macro-Economics CHP 19,20,21,22

All of the following are problems in measuring the unemployment rate, except that A. People on active military service are included as unemployed. B. lack of verification of​ people's responses in the household survey. C. discouraged workers are not included in the labor force. D. part-time workers are included as employed.

A. People on active military service are included as unemployed

Workers who lose their jobs because of a recession are experiencing

Cyclical

Unemployment caused by an increase in job quits would be classified as

Frictional

When the economy is at full employment, what types of unemployment remain?

Frictional and Structural

The employment-population ratio measures the

It measures the percentage of the working-age population that is employed. EPR= Employment/Working age population

When the economy is at full employment, unemployment is equal to

Natural Rate of Unemployment

Relationship between frictional unemployment and Job Search

People are said to be frictionally unemployed when they are between jobs and searching for new jobs

The type of unemployment most likely to result in hardship for the people who are unemployed is

Structural unemployment: Long term unemployment as workers look for ways to gain new job skills

natural rate of unemployment

The sum of structural unemployment and frictional unemployment

If someone worked only an hour per week during the previous week

They are NOT consider unemployed

When there are part-time workers ​, the official BLS measure of the unemployment rate ---------- the true degree of unemployment.

Understates

When there are workers that drop out of the labor force, the official BLS measure of the unemployment rate is-----the true degree of unemployment

Understates

When an unemployed person drops out of the labor​ force, it

does not affect the employment-population ratio

The​ short-term unemployment that arises from the process of matching workers with jobs is called

frictional unemployment.

Three types of unemployment are

frictional, structural, cyclical

Establishment Survey

interviews businesses and measures total employment in the economy.

Household Survey

interviews households and collects data that is used to measure the unemployment rate

Unemployment arising from a persistent mismatch between the skills and characteristics of workers and the requirements of jobs is called

structural unemployment.

The​ "normal" underlying level of unemployment in the economy is

the natural rate of unemployment. the​ full-employment rate of unemployment. the sum of structural unemployment and frictional unemployment.

The labor force participation rate is calculated by

the percentage of the​ working-age population that is in the labor force or Labor force/working−age population×100.

When an unemployed person drops out of the labor force, the unemployment rate

understates the true degree of joblessness in the economy

The unemployment rate is calculated as follows:

unemployment rate = number of unemployed/labor force x 100