Q: Suppose the working-age population is 250 million, the labor force is 160 million, and 10 million people are unemployed. What is the unemployment rate?

$$\frac{10\text{ million}}{160\text{ million}} \times 100 = 6.25\%$$

Q: Suppose the labor force is 200 million, and 190 million are employed. What is the unemployment rate?

$$\frac{10}{200} \times 100 = 5\%$$

Question 1

Which of the following best describes the labor force participation rate?

Accepted Answer

The percentage of the working-age population that is either employed or actively seeking work.

Question 2

Suppose the working-age population is 250 million, the labor force is 160 million, and 10 million people are unemployed. What is the unemployment rate?

Accepted Answer

$$\frac{10	ext{ million}}{160	ext{ million}} 	imes 100 = 6.25\%$$

Question 3

Which group is NOT counted as part of the labor force according to the BLS household survey?

Accepted Answer

Discouraged workers who have stopped looking for work.

Question 4

If the unemployment rate increases while the labor force participation rate remains constant, which of the following must be true?

Accepted Answer

The number of unemployed people has increased relative to the labor force.

Question 5

Which type of unemployment is most likely to increase during a recession?

Accepted Answer

Cyclical unemployment

Question 6

A recent college graduate is actively searching for a job but has not yet found one. This person is experiencing:

Accepted Answer

Frictional unemployment

Question 7

Which of the following policies is most likely to reduce structural unemployment?

Accepted Answer

Providing retraining programs for displaced workers.

Question 8

If the government increases unemployment insurance payments, what is the most likely effect on the unemployment rate?

Accepted Answer

It will increase because people may take longer to find jobs.

Question 9

Which of the following is an example of structural unemployment?

Accepted Answer

A 2D animator who loses their job because the industry has shifted to 3D animation.

Question 10

The establishment survey (payroll survey) differs from the household survey in that it:

Accepted Answer

Samples businesses rather than households.

Question 11

Suppose the labor force is 200 million, and 190 million are employed. What is the unemployment rate?

Accepted Answer

$$\frac{10}{200} 	imes 100 = 5\%$$

Question 12

Which of the following statements about discouraged workers is correct?

Accepted Answer

They are not included in the labor force.

Question 13

If the minimum wage is increased by 1 percent, what is the estimated effect on teenage unemployment according to studies?

Accepted Answer

Teenage unemployment increases by about 2 percent.

Question 14

Which of the following is NOT a commonly used measure of inflation?

Accepted Answer

Labor force participation rate (LFPR)

Question 15

During the Covid-19 pandemic, which problem made measuring unemployment more difficult?

Accepted Answer

Many people were counted as employed but absent from work.

Question 16

Which of the following best describes frictional unemployment?

Accepted Answer

Short-term unemployment from the process of matching workers with jobs.

Question 17

If the labor force participation rate for men has declined since 1948, but the rate for women has increased, what is the most likely effect on the overall labor force participation rate?

Accepted Answer

It has decreased overall, but less than it would have if women's rate had not increased.

Question 18

Which of the following is a reason why the unemployment rate may understate actual unemployment?

Accepted Answer

It only measures employment, not intensity of employment.

Question 19

Suppose the working-age population is 300 million, the labor force is 180 million, and 150 million are employed. What is the employment-population ratio?

Accepted Answer

$$\frac{150}{300} 	imes 100 = 50\%$$

Question 20

Which of the following is true about the natural rate of unemployment?

Accepted Answer

It consists of frictional and structural unemployment.

Measuring Unemployment and Inflation: Key Concepts in Macroeconomics

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