Q: Which of the following formulas correctly calculates the unemployment rate?

$$\displaystyle \text{Unemployment\ Rate} = \frac{\text{Number\ of\ Unemployed}}{\text{Labor\ Force}} \times 100$$

Q: The labor force participation rate is calculated as:

$$\displaystyle \text{Labor\ Force\ Participation\ Rate} = \frac{\text{Labor\ Force}}{\text{Working\text{-}age\ Population}} \times 100$$

Question 1

Which of the following formulas correctly calculates the unemployment rate?

Accepted Answer

$$\displaystyle 	ext{Unemployment\ Rate} = \frac{	ext{Number\ of\ Unemployed}}{	ext{Labor\ Force}} 	imes 100$$

Question 2

Which of the following individuals would NOT be counted as unemployed according to official statistics?

Accepted Answer

Someone who worked only one hour per week during the previous four weeks.

Question 3

The labor force participation rate is calculated as:

Accepted Answer

$$\displaystyle 	ext{Labor\ Force\ Participation\ Rate} = \frac{	ext{Labor\ Force}}{	ext{Working	ext{-}age\ Population}} 	imes 100$$

Question 4

Suppose the population of a country is 295 million, the labor force is 115 million, and 11.5 million people are unemployed. What is the unemployment rate? (Round to one decimal place.)

Accepted Answer

10.0\%

Question 5

If an unemployed person becomes discouraged and stops looking for work, what is the effect on the official unemployment rate?

Accepted Answer

It understates the true degree of joblessness in the economy.

Question 6

Which of the following best describes a discouraged worker?

Accepted Answer

Someone who is available for work but has not looked for a job in the last four weeks because they believe no jobs are available.

Question 7

Which of the following is NOT a type of unemployment?

Accepted Answer

Unnatural unemployment

Question 8

Which type of unemployment is most likely to require retraining or acquiring new job skills?

Accepted Answer

Structural unemployment

Question 9

Suppose the economy enters a recession and a factory worker is laid off but rehired when the economy recovers. What type of unemployment did the worker experience?

Accepted Answer

Cyclical unemployment

Question 10

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

Accepted Answer

Frictional and structural

Question 11

Which of the following best describes the difference between a nominal variable and a real variable?

Accepted Answer

Nominal variables are calculated in current-year prices and real variables are measured in dollars of the base year for the price index to correct the effects of inflation.

Question 12

Suppose a country’s Consumer Price Index (CPI) was constant from 2000 to 2005. What does this indicate about inflation during that period?

Accepted Answer

The country experienced zero inflation.

Question 13

In a simple economy, the following goods and services are produced in a year: 50 sweatshirts at $$35 each, 40 dental examinations at 75 $$each, and 1,000 coffee drinks at $$4 each. All 2,000 coffee beans at 0.50 $$each are used to make the coffee drinks. What is the nominal GDP for this economy?

Accepted Answer

$8,750

Question 14

Which of the following is NOT a durable good?

Accepted Answer

Clothing

Question 15

A household in China purchases an automobile produced in the United States. In the U.S. GDP accounts, this transaction is included as:

Accepted Answer

U.S. net exports

Question 16

How are intermediate goods treated in the calculation of GDP?

Accepted Answer

Their value is not counted separately, but included as part of the value of the final good for which they are an input.

Question 17

Which of the following is an example of an intermediate good?

Accepted Answer

The bread that goes into a sub sandwich that is sold by Quiznos.

Question 18

Which of the following is an example of a final good?

Accepted Answer

A soy latte sold by Starbucks to a student.

Question 19

A transfer payment is a payment by the government to an individual:

Accepted Answer

For which the government does not receive a good or service in return.

Question 20

Which of the following is the largest component of spending in U.S. GDP?

Accepted Answer

Consumption spending

Macroeconomics: Labor Markets, Unemployment, and GDP Concepts – Guided Study

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