Macroeconomics Ch8 Quiz

A nation has a population of 260 million people. Of these, 60 million are retired, in the military, institutionalized, or under 16 years old. There are 188 million who are employed and 12 million who are unemployed. What is the unemployment rate?

6%

The unemployed are those people who

Are not employed but are seeking work

In calculating the unemployment rate, part-time workers are

counted as employed because they are receiving payment for work.

A headline states: "Real GDP falls again as the economy slumps." This condition is most likely to produce what type of unemployment?

cyclical

Suppose there are 5 million unemployed workers seeking jobs. After a period of time, 1 million of them become discouraged over their job prospects and cease to look for work. As a result of this, all else equal, the official unemployment rate would

decline

The labor force includes

employed workers and persons who are officially unemployed.

In calculating the unemployment rate, "discouraged" workers who are not actively seeking employment are

excluded from the labor force

Kara voluntarily quit her job as an insurance agent to return to school full time to earn an MBA degree. With degree in hand, she is now searching for a position in management. Kara presently is

frictionally unemployed.

Part-time workers who want full-time work are counted as

fully employed and therefore the official unemployment rate may understate the level of unemployment.

The natural rate of unemployment

is equal to the total of frictional and structural unemployment.

The best example of a "frictionally unemployed" worker is one who

is in the process of voluntarily switching jobs.

The presence of discouraged workers

may cause the official unemployment rate to understate the true amount of unemployment.

"Full employment" refers to the situation when there is

no cyclical unemployment.

A mismatch between the geographic location of workers and the location of job openings would result in which type of unemployment?

structural

Kevin has lost his job in an automobile plant because the company switched to robots for its welding step in the assembly line. Kevin plans to go to technical school to learn how to repair microcomputers. The type of unemployment Kevin is faced with is

structural.

Answer the next question on the basis of the following information about the hypothetical economy of Asland. All figures are in millions. Unemployed 7 Total population 145 Employed 95 Discouraged workers 3 The labor force in Asland is

102 million

The total adult population of an economy is 175 million, the number of employed is 122 million, and the number of unemployed is 17 million. The percentage of adults who are not in the labor force is

20.6%

Answer the next question on the basis of the following information about a hypothetical economy. Full-time employed = 80 Part-time employed = 25 Unemployed = 15 Discouraged workers = 5 Members of underground economy = 6 Consumer price index = 110 The unemployment rate is

25%

Dr. Homer Simpson, an economics professor, decided to take a year off from teaching to run a commercial fishing boat in Alaska. That year, Professor Simpson would be officially counted as

Employed

Use the following information to answer the next question. The following items describe the responses of four individuals to a Bureau of Labor Statistics (BLS) survey of employment. Mollie just graduated from college and is now looking for work. She has had three job interviews in the past month but still has not gotten a job offer. George used to work in an automotive assembly plant. He was laid off six months ago as the economy weakened. He expects to return to work in a few months when national economic conditions improve. Jeanette worked as an aircraft design engineer for a company that produces military aircraft until she lost her job last year when the Federal government cut defense spending. She has been looking for similar work for a year but no company seems interested in her aircraft design skills. Ricardo lost his job last year when his company downsized and laid off middle-level managers. He tried to find another job for a year but was unsuccessful and quit looking for work. Which individual is structurally unemployed?

Jeanette