chap 5

a) The working-age population is defined as the number of
A) people over the age of 16 who are not in jail, hospital, or other institution.
B) people who have a job.
C) people working full-time jobs who are over the age of 16.
D) people looking for work.
d2) The working-age population can be divided into two groups,
A) people in the labor force and people looking for work.
B) people in the labor force and people with a job.
C) people looking for work and those in the armed forces.
D) people in the labor force and people who are not in the labor force.
b3) The total number of people aged 16 years and over who are not institutionalized ________.
A) equals the number of employed plus unemployed
B) is the working-age population
C) does not include students
D) is the labor force
b4) Which of the following statements is incorrect?
A) The labor force is equal to the number of people employed plus the number of people unemployed.
B) The working age population includes everyone over the age of 16.
C) The unemployment rate is the number of persons who are unemployed divided by the labor force then times 100.
D) The labor-force participation rate is the labor force divided by the working-age population then times 100.
d5) Which of the following is NOT included in the working-age population?
A) discouraged workers
B) people waiting to be called back to a job after being laid off
C) retirees under the age of 55
D) people in prison
b6) All people in the working-age population can be divided into
A) labor force participants.
B) employed, unemployed, or not in the labor force.
C) either over-employed or under-employed.
D) potential employees.
c7) Suppose the working age population in Tiny Town is 100 people. If 25 of these people are NOT in the labor force, the ________ equals ________.
A) unemployment rate; 25/100 × 100
B) unemployment rate; 25/75 × 100
C) labor force; 75
D) labor force; 25/100 × 100
c8) The labor force is the sum of the
A) working-age population and the number of unemployed people.
B) number of employed people and the working-age population.
C) number of employed people and the number of unemployed people.
D) total population and the number of unemployed people.
b9) The labor force is defined as
A) people with full time jobs.
B) workers with jobs and unemployed workers.
C) all people capable of work.
D) All of the above answers are correct.
b10) The ________ equals the number of ________.
A) labor force; persons over 16 years old
B) labor force; unemployed and employed persons
C) working age population; employed persons
D) unemployment rate; people unemployed
a11) The labor force is defined as people
A) who have a job or are looking for a job.
B) in the working-age population who have a job.
C) in the working-age population who have a full time job.
D) who are 16 years of age or older.
b12) Which population category equals the sum of employed and unemployed people?
A) working-age population
B) labor force
C) young and institutionalized
D) not in the labor force
c13) The ________ is the total number of people aged 16 years and older (and not in jail, hospital or institutional care) while the ________ is the number of people employed and the unemployed.
A) labor force; working-age population
B) labor force participation rate; labor force
C) working-age population; labor force
D) working-age population; labor force participation rate
d14) The labor force is defined as the number of
A) people 16 and over.
B) unemployed people.
C) people with jobs, both part-time and full-time.
D) people who are employed and unemployed
c15) The labor force is defined as the
A) number of people over 16 years of age.
B) number of people who are working.
C) sum of employed and unemployed people.
D) number of people in blue-collar jobs.
a16) The labor force is defined as the
A) number of employed people plus the number of unemployed people.
B) number of people who are working.
C) number of people who are working in labor-type jobs.
D) number of union members who are working.
d17) The labor force includes
A) only the number of people employed.
B) discouraged workers.
C) only the number of people unemployed.
D) both employed and unemployed workers.
a18) The labor force is defined as the number of people who
A) are employed plus the number of people who are unemployed.
B) are available and looking for work but are unable to find employment.
C) would like to have a job but have stopped seeking work.
D) would like to have a full-time job but are working part-time.
a19) Full-time students and prisoners are ________.
A) not in the labor force
B) in the labor force
C) counted as discouraged workers
D) counted as unemployed
d20) Which of the following is NOT considered to be in the labor force?
A) a student who works part-time
B) a person who is not working but who has tried to find a job in the past week
C) a person who is waiting to start a new job in the next 30 days
D) a person who is not working and who has not tried to find a job
c21) In an economy, 42 million people are in the labor force, 38 million are employed, and 47 million are of working age. How many people are not in the labor force?
A) 19 percent
B) 9 million
C) 5 million
D) 4 million
b22) If the number of people unemployed is 100, the number of people employed is 1000, and the working-age population is 1400, then the labor force is
A) 1000.
B) 1100.
C) 1400.
D) 1500.
a23) The official U-3 unemployment rate
A) includes persons without a job who have made efforts in the last week to find a job.
B) includes persons without a job, whether they are actively searching for work or not.
C) counts discouraged workers as unemployed.
D) counts people with part-time jobs who want full-time jobs as unemployed.
b24) The official U-3 unemployment rate includes the total number of people who
A) have jobs or are currently looking for jobs.
B) are available and looking for work but unable to find employment.
C) would like to have a job but have stopped seeking work.
D) would like to have a full-time job but are working part-time.
a25) Which of the following people would be counted as is employed in the Current Population Survey?
A) Rich, who is working 20 hours a week but wants a full-time job
B) Misty, who just quit her job to return full-time to school
C) April, who just graduated from college and is looking for work
D) Jason, who was laid off from work less than 6 months ago but who has stopped looking for work
c26) Which of the following best fits the definition of unemployed?
A) retired and not working
B) working less than a full work week
C) not working but looking for a job
D) not working and not looking for work
d27) Using the definition of unemployment, which of the following individuals would be unemployed?
A) A full-time student quits school, enters the labor market for the first time, and searches for employment.
B) Because of the increased level of automobile imports, an employee of General Motors is laid off but expects to be called back to work soon.
C) Because of a reduction in the military budget, your next door neighbor loses her job in a plant where nuclear warheads are made and must look for a new job.
D) All of these individuals are unemployed.
b28) Which of the following people would be considered unemployed by the Bureau of Labor Statistics?
I. Mrs. X retires from her job at the age of 55 and does not look for another job.
II. Mr. Y was laid off from his job as a welder, but expects to be rehired in 8 months.
A) I only
B) II only
C) both I and II
D) neither I nor II
c29) Using the official measure of unemployment, which of the following people is considered unemployed?
A) a part-time worker who wishes to work full time
B) a person who gave up looking for jobs because he or she was discouraged about his or her job prospects
C) a person who has been searching for work, but turns down a job paying a lower wage rate than desired
D) a person who is working but expects to be laid off at the end of the month
c30) Using the official measure of unemployment, which of the following would NOT be counted as unemployed?
A) a person who is not working but who has tried to find a job in the past week
B) a person who is waiting to be called back to a job after having been laid off
C) a person who performs traditional housework and does not work outside the home for pay
D) a person who is waiting to start a new job in the next 30 days
b31) The unemployment rate is the ________ who are unemployed.
A) number of people in the labor force
B) percentage of people in the labor force
C) percentage of people in the country
D) percentage of the working-age population
c32) The unemployment rate is calculated as
A) [(labor force) ÷ (population)] × 100.
B) [(unemployment) ÷ (population)] × 100.
C) [(unemployment) ÷ (labor force)] × 100.
D) [(labor force) ÷ (unemployment)] × 100
b33) The unemployment rate equals
A) (number of people employed/working age population) × 100.
B) (number of people unemployed/labor force) × 100.
C) (labor force/working age population) × 100.
D) (number of people employed/number of people age 16 and over) × 100.
d34) The unemployment rate equals the number of
A) unemployed workers multiplied by 100.
B) unemployed workers divided by the population then multiplied by 100.
C) unemployed workers divided by the number of employed workers then multiplied by 100.
D) unemployed workers divided by the labor force then multiplied by 100.
a35) The unemployment rate equals
A) (the number of unemployed workers)/(the number of employed + unemployed workers) × 100.
B) (the number of unemployed workers)/(the civilian population) × 100.
C) (the number of unemployed workers)/(the U.S. population older than 16 years of age) × 100.
D) (the number of unemployed + employed workers)/(U.S. population older than 16 years of age) × 100.
d36) The unemployment rate equals
A) the total number of people without jobs in a given period.
B) the percentage of the population not currently employed.
C) the rate of change in unemployment figures from one period to another.
D) the percentage of the labor force currently unemployed.
c37) The unemployment rate is found by dividing the number of unemployed people by the
A) number of working individuals, and multiplying by 100.
B) number of the working-age population, and multiplying by 100.
C) sum of working individuals plus unemployed workers, and multiplying by 100.
D) number in the labor force, and dividing by 100.
a38) The ________ is calculated as the number of people ________ divided by the labor force multiplied by 100.
A) unemployment rate; unemployed
B) employment-to-population ratio; unemployed
C) employment rate; employed
D) employment-to-population ratio; in the working age population
c39) The unemployment rate is defined as the
A) number of people not working.
B) percentage of the population not working.
C) percentage of the labor force not working.
D) percentage of the working-age population not working
b40) The unemployment rate is measured as
A) the number of people that want to work but cannot find jobs out of the entire population.
B) the percentage of people in the labor force who are unemployed.
C) an indicator to determine long-term economic growth.
D) an indicator for potential inflation.
c41) To calculate the unemployment rate, which of the following are necessary pieces of information?
I. the number of unemployed persons
II. the population
III. the number of people in the labor force
IV. the working age population
A) I, II III and IV
B) I and II
C) I and III
D) I and IV
c42) The unemployment rate measures the percentage of
A) people who want full-time jobs, but can’t find them.
B) the working-age population who can’t find a job.
C) people in the labor force who can’t find a job.
D) the working age population that can’t find a full-time job.
a43) Which labor market statistic tends rise during recessions and fall during expansions?
A) the unemployment rate
B) the labor-force participation rate
C) the employment-to-population ratio
D) aggregate hours
d44) Suppose the population of Tiny Town is 100 people and the working age population is 70. If 10 of these people are unemployed, the unemployment rate in Tiny Town is
A) 10 percent.
B) 10/70 × 100.
C) 10/80 × 100.
D) There is not enough information provided to calculate the unemployment rate.
c45) The population of Tiny Town is 100 people and the labor force is made up of 75 people. If 5 of these people are unemployed, the unemployment rate is
A) 5/100 × 100.
B) 5/80 × 100.
C) 5/75 × 100.
D) There is not enough information provided to calculate the unemployment rate.
b46) Based on the following data for the country of Tiny Town, the unemployment rate equals:
Population = 100
Labor force = 80
Number of employed persons = 70
Number of discouraged workers = 5
A) 10/100 × 100.
B) 10/80 × 100.
C) 15/80 × 100.
D) 5/70 × 100.
c47) In an economy, 23 million people are employed and 2 million are unemployed, but 5 million part-time workers would prefer full-time work. What is the unemployment rate?
A) 23.2 percent
B) 6.7 percent
C) 8 percent
D) 25 percent
c48) Assume that the total labor force is 100 individuals with 10 unemployed. The unemployment rate is ________. Now assume that 10 people drop out of the labor force and that 10 remain unemployed. The new unemployment rate is ________.
A) 9 percent; 10 percent
B) 10 percent; 9 percent
C) 10 percent; 11 percent
D) 11 percent; 10 percent
a49) Which of the following decreases the official U-3 unemployment rate?
A) Workers leave the labor force.
B) More women enter the labor force and seek jobs.
C) Young people graduate from college and start to look for their first full-time job.
D) None of the above because they all increase or do not change the unemployment rate.
b50) During a recession, people drop out of the labor force because they are unable to find a job. All else the same, this
A) increases the official U-3 unemployment rate.
B) decreases the official U-3 unemployment rate.
C) does not change the official U-3 unemployment rate.
D) increases the official U-3 unemployment rate and the labor force participation rate.
a51) In August 2012, the official U-3 unemployment rate dropped from 8.3 percent to 8.1 percent. This change could have been caused by
A) unemployed workers giving up looking for a job.
B) part-time workers getting a full-time job.
C) full-time workers becoming part-time workers.
D) workers who had previously given up looking for a job starting to look again.
b52) In the United States in 1996, the population was 265.5 million and the working age population was 200.6 million. There were 133.9 million people in the labor force and 126.7 of them were employed. The unemployment rate equaled ________.
A) 7.2 percent
B) 5.4 percent
C) 3.6 percent
D) 33 percent
c53) Suppose there are 100 million in the labor force, and 6 million unemployed people. During the next month, 200,000 people lose their jobs and 300,000 find jobs. The new total of employed persons is ________ and the new unemployment rate is ________.
A) 100.1 million; 5.8 percent
B) 100 million; 6.1 percent
C) 94.1 million; 5.9 percent
D) 93.9 million; 6.1 percent
a54) Suppose the working-age population is 220 million, the labor force is 150 million, and the unemployment rate is 10 percent. The number of unemployed people is
A) 15 million.
B) 22 million.
C) 37 million.
D) 7 million.
c55) Suppose initially that the working-age population is 220 million, the labor force is 150 million, and the official U-3 unemployment rate is 10 percent. 5 million new jobs are created and filled by 5 million people who had previously been discouraged workers. What is the new U-3 unemployment rate?
A) 6.25 percent
B) 6.7 percent
C) 9.7 percent
D) 8.7 percent
a56) Between August 2011 and August 2012 the number of discouraged workers decreased from 977,000 to 844,000. Assuming the change resulted from discouraged workers starting to make specific efforts to find a job again, this change creates
A) an increase to the U-3 unemployment rate.
B) a decrease to the U-3 unemployment rate.
C) no change to the U-3 unemployment rate.
D) a decrease in the labor force participation rate.
a57) Between August 2011 and August 2012 the number of economic part-time workers decreased from 8.8 million to 8.0 million. Assuming the change resulted from economic part-time workers transitioning to full-time jobs, this change created
A) no change to the U-3 unemployment rate.
B) a decrease to the U-3 unemployment rate.
C) an increase to the U-3 unemployment rate.
D) an increase in the employment-to-population ratio.
c58) If the number of people unemployed is 100, the number of people employed is 1000, and the working-age population is 1400, then the unemployment rate is
A) 6.6 percent.
B) 10 percent.
C) 9.1 percent.
D) 7.1 percent.
b59) Suppose the population is 220 million people, the labor force is 150 million people, the number of people employed is 130 million and the working-age population is 175 million people. What is the unemployment rate?
A) 9.0 percent
B) 13.3 percent
C) 11.4 percent
D) 15.4 percent
b60) Suppose there are currently 100 people unemployed, 1500 people employed, 1600 people in the labor force, and 2000 people in the working age population. The unemployment rate equals 100 times
A) 100/1500.
B) 100/1600.
C) 100/2000.
D) 1500/2000.
c61) If the population is 300 million, with 70 million under the age of 16 and institutionalized, another 70 million not in the labor force, 10 million unemployed and 150 million employed, the unemployment rate is
A) 23.3 percent.
B) 6.7 percent.
C) 6.25 percent.
D) 26.7 percent.
c62) Suppose the current unemployment rate is 5 percent, the labor force is 400 million people, the labor force participation rate is 80 percent and the working-age population is 500 million people. What number of people are unemployed?
A) 100 million people
B) 25 million people
C) 20 million people
D) 5 million people
dPerson A Now that the kids are in school for a full day, this person is looking for work and has interviewed for three jobs during the past two weeks.
Person B This person has been laid off from a job but expects to be called back as soon as the economy improves.
Person C This person has just graduated from college and will start a new job in three weeks. In the meantime this person will tour the great American beaches.
Person D This person was laid off last year when new equipment was installed at the plant, reducing the number of workers needed. Shortly after being laid off, this person looked for a new job, was unable to find one and then stopped looking, even though this person still wants a job and is available for work.

63) The above table shows answers given by people interviewed in a government survey of households. Which individuals are considered to be a part of the labor force?
A) C and D
B) B, C, and D
C) A, C, and D
D) A, B, and C

aPerson A Now that the kids are in school for a full day, this person is looking for work and has interviewed for three jobs during the past two weeks.
Person B This person has been laid off from a job but expects to be called back as soon as the economy improves.
Person C This person has just graduated from college and will start a new job in three weeks. In the meantime this person will tour the great American beaches.
Person D This person was laid off last year when new equipment was installed at the plant, reducing the number of workers needed. Shortly after being laid off, this person looked for a new job, was unable to find one and then stopped looking, even though this person still wants a job and is available for work.
64) The above table shows answers given by people interviewed in a government survey of households. Which individuals are considered unemployed using the official U-3 unemployment rate?
A) A, B, and C
B) B, C, and D
C) A, C, and D
D) C and D
dPerson A Now that the kids are in school for a full day, this person is looking for work and has interviewed for three jobs during the past two weeks.
Person B This person has been laid off from a job but expects to be called back as soon as the economy improves.
Person C This person has just graduated from college and will start a new job in three weeks. In the meantime this person will tour the great American beaches.
Person D This person was laid off last year when new equipment was installed at the plant, reducing the number of workers needed. Shortly after being laid off, this person looked for a new job, was unable to find one and then stopped looking, even though this person still wants a job and is available for work.
65) The above table shows answers given by people interviewed in a government survey of households. Which individual or individuals are considered marginally attached?
A) A
B) B, C, and D
C) A and D
D) D
cTotal
population (millions) Currently employed (millions) Not working and looking for work (millions) Want to work but no longer looking for work
(millions)
80 40 2 4
66) In the table above, the size of the labor force is
A) 80 million.
B) 46 million.
C) 42 million.
D) 40 million.
dTotal
population (millions) Currently employed (millions) Not working and looking for work (millions) Want to work but no longer looking for work
(millions)
80 40 2 4
67) In the table above, the number of people officially unemployed is ________.
A) 40 million
B) 6 million
C) 4 million
D) 2 million
dTotal
population (millions) Currently employed (millions) Not working and looking for work (millions) Want to work but no longer looking for work
(millions)
80 40 2 4
68) In the table above, the official U-3 unemployment rate is
A) 50 percent.
B) 15 percent.
C) 10 percent.
D) 5 percent.
dTotal
population (millions) Currently employed (millions) Not working and looking for work (millions) Want to work but no longer looking for work
(millions)
80 40 2 4
69) In the table above, the number of marginally attached workers is ________.
A) 40 million
B) 6 million
C) 2 million
D) 4 million
d70) The employment-to-population ratio equals
A) (labor force)/(working-age population) × 100.
B) (number of people employed)/(labor force) × 100.
C) (number of people with full-time jobs)/(labor force) × 100.
D) (number of people employed)/(working-age population) × 100.
d71) The employment-to-population ratio is defined as
A) total employment divided by labor hours then multiplied by 100.
B) the labor force divided by the working-age population then multiplied by 100.
C) total employment divided by the labor force then multiplied by 100.
D) total employment divided by the working-age population then multiplied by 100.
b72) The employment-to-population ratio is equal to the number of
A) unemployed people divided by the total population then multiplied by 100.
B) employed people divided by the working-age population then multiplied by 100.
C) employed people divided by the total population then multiplied by 100.
D) unemployed people divided by the working age population then multiplied by 100.
b73) The percentage of people employed aged 16 years and older divided by the working-age population is known as the
A) employment rate.
B) employment-to-population ratio.
C) labor force participation rate.
D) working-age population ratio.
c74) The percentage of the people of working age who have jobs is called the ________.
A) labor force
B) inverse of the unemployment rate
C) employment-to-population ratio
D) employment-to-working-age-population ratio
a75) In August 2012, the employment-to-population ratio dropped from 58.4 percent to 58.3 percent. This change could have been the result of
A) an increase in the working-age population.
B) unemployed workers becoming part-time workers.
C) unemployed workers becoming discouraged workers.
D) discouraged workers starting to look for jobs again.
b76) In an economy, 43 million people are employed, 3 million are unemployed, and 4 million are
not in the labor force. What is the employment-to-population ratio?
A) 86 percent
B) 92 percent
C) 93 percent
D) 6.5 percent
d77) Suppose the number of people employed is 25 million and the number of people in the labor force is 75 million. What is the employment-to-population ratio?
A) 33 percent
B) 25 percent
C) 75 percent
D) There is not enough information given to answer the question.
c78) If the number of people unemployed is 100, the number of people employed is 1000, and the working-age population is 1400, then the employment-to-population ratio is
A) 78.6 percent.
B) 75 percent.
C) 71.4 percent.
D) 66.6 percent.
b79) If the population is 300 million, with 70 million under the age of 16 and institutionalized, another 70 million not in the labor force, 10 million unemployed, and 150 million employed, the employment-to-population rate is
A) 53.3 percent.
B) 65.2 percent.
C) 46.7 percent.
D) 87.5 percent.
d80) Based on the following data for the country of Tiny Town, the employment-to-population ratio equals ________ multiplied by 100.
Population = 200
Working age population = 100
Labor Force = 90
Number of employed persons = 75
A) 90/100.
B) 75/200
C) 90/200.
D) 75/100.
a81) From 1980 to 2000 the trend in the employment-to-population ratio was ________ and from 2000 to 2012 the trend was ________.
A) upward; downward
B) downward; downward
C) upward; upward
D) downward; upward
aTotal
population (millions) Currently employed (millions) Not working and looking for work (millions) Want to work but no longer looking for work
(millions)
80 40 2 4
83) The labor force participation rate is calculated as the
A) labor force divided by the number of persons employed then multiplied by 100.
B) number of persons unemployed divided by the labor force then multiplied by 100.
C) labor force divided by the unemployment rate then multiplied by 100.
D) labor force divided by the working age population then multiplied by 100.
Answer: D
bTotal
population (millions) Currently employed (millions) Not working and looking for work (millions) Want to work but no longer looking for work
(millions)
80 40 2 4
84) The labor force participation rate is percentage of the ________ who are in the labor force.
A) people under age 65
B) working-age population
C) people over age 16
D) population
dTotal
population (millions) Currently employed (millions) Not working and looking for work (millions) Want to work but no longer looking for work
(millions)
80 40 2 4
85) The labor force participation rate shows the percentage of
A) people not working, but who want to work.
B) people who are not actively participating in meaningful economic activity.
C) new entrants into the labor force.
D) non-institutionalized working-age people who are actually working or seeking employment.
a86) From 1980 to 2000 the trend in the labor force participation rate was ________ and from 2000 to 2012 the trend was ________.
A) upward; downward
B) downward; downward
C) upward; upward
D) downward; upward
d87) Which of the following pieces of information do you need to calculate the labor force participation rate?
I. the number of employed persons
II. the number of unemployed persons
III. the population
IV. the working age population
A) I and II
B) I and III
C) I, II and III
D) I, II and IV
d88) If the people who take early retirement are not counted in the working-age population, then
A) the unemployment rate would be lower.
B) the labor force participation rate would be less.
C) the unemployment rate would be higher.
D) the labor force participation rate would be higher.
a89) In August 2012, the labor force participation rate dropped from 63.7 percent to 63.5 percent. This change could have been caused by
A) unemployed workers giving up looking for a job.
B) full-time workers becoming part-time workers.
C) unemployed workers getting full-time jobs.
D) discouraged workers starting to look for jobs again.
b90) In an economy, 40 million people are employed, 2 million are unemployed, and 8 million are not in the labor force. What is the labor force participation rate?
A) 83 percent
B) 84 percent
C) 80 percent
D) 87.5 percent
a91) If the labor force participation rate is rising and the working-age population is not changing, then the
A) size of the labor force is rising.
B) number of unemployed people is rising and the size of the labor force is falling.
C) size of the labor force is falling.
D) number of unemployed people is falling and the size of the labor force is rising.
a92) Suppose the labor force in Tiny Town is 100 people. If the ________ in Tiny Town is 150 people, the labor force participation rate equals ________ multiplied by 100.
A) working age population; 100/150
B) working age population; 100/250
C) number of employed persons; 100/250
D) number of employed persons; 100/150
d93) Suppose there are currently 100 people unemployed, 1500 people employed, and 2000 people in the working age population. The labor force participation rate equals 100 times
A) 100/1500.
B) 100/1600.
C) 1500/2000.
D) 1600/2000.
a94) If the number of people unemployed is 100, the number of people employed is 1000, and the working-age population is 1400, then the labor force participation rate is
A) 78.6 percent.
B) 71.4 percent.
C) 64.3 percent.
D) 66.6 percent.
c95) Suppose the population is 220 million people, the labor force is 150 million people, the number of people employed is 130 million and the working-age population is 175 million people. What is the labor force participation rate?
A) 0.68 percent
B) 68 percent
C) 85.7 percent
D) 86.7 percent
a96) If the population is 300 million, with 70 million under the age of 16 and institutionalized, another 70 million not in the labor force, 10 million unemployed and 150 million employed, the labor force participation rate is
A) 69.6 percent.
B) 23.3 percent.
C) 6.67 percent.
D) 50 percent.
aCategory Number (millions)
Discouraged workers 15
Unemployed workers 40
Employed workers 100
Population (16 years and over) 225
97) In the above table, the working age population is
A) 225 million.
B) 100 million.
C) 140 million.
D) 155 million.
cCategory Number (millions)
Discouraged workers 15
Unemployed workers 40
Employed workers 100
Population (16 years and over) 225
98) In the above table, the size of the labor force is
A) 210 million.
B) 155 million.
C) 140 million.
D) 100 million.
dCategory Number (millions)
Discouraged workers 15
Unemployed workers 40
Employed workers 100
Population (16 years and over) 225

99) In the above table, the unemployment rate is
A) 6 percent.
B) 24 percent.
C) 18 percent.
D) 29 percent.

cCategory Number (millions)
Discouraged workers 15
Unemployed workers 40
Employed workers 100
Population (16 years and over) 225
100) In the above table, the labor force participation rate is
A) 55 percent.
B) 44 percent.
C) 62 percent.
D) 69 percent.
dCategory Number (millions)
Discouraged workers 15
Unemployed workers 40
Employed workers 100
Population (16 years and over) 225
101) In the above table, the employment-to-population ratio is
A) 51 percent.
B) 42 percent.
C) 62 percent.
D) 44 percent.
cCategory Number (millions)
Discouraged workers 15
Unemployed workers 40
Employed workers 100
Population (16 years and over) 225
102) In the above table, the number of marginally attached workers is
A) 40 million.
B) 55 million.
C) 15 million.
D) 100 million.
aComponent Number of people
(millions)
Under 16 50
Working full-time 90
Working part-time 30
Retired 40
Unemployed 5
103) Using the data in the above table, the unemployment rate is
A) 4.0 percent.
B) 4.16 percent.
C) 5.55 percent.
D) 28.0 percent.
cComponent Number of people
(millions)
Under 16 50
Working full-time 90
Working part-time 30
Retired 40
Unemployed 5
104) Using the data in the above table, the labor force is ________ million.
A) 215
B) 120
C) 125
D) 165
cComponent Number of people
(millions)
Under 16 50
Working full-time 90
Working part-time 30
Retired 40
Unemployed 5
105) Using the data in the above table, the labor force participation rate is
A) 66 percent.
B) 58.1 percent.
C) 75.7 percent.
D) 96.0 percent.
cComponent Number of
people
Total population 2600
Working-age population 2000
Not in labor force 500
Employed 1300
106) Using the information in the table above, calculate the number of people in the labor force.
A) 2500
B) 2100
C) 1500
D) 800
cComponent Number of
people
Total population 2600
Working-age population 2000
Not in labor force 500
Employed 1300
107) Using the information in the table above, calculate the unemployment rate.
A) 53.3 percent
B) 30.8 percent
C) 13.3 percent
D) 7.7 percent
bComponent Number of
people
Total population 2600
Working-age population 2000
Not in labor force 500
Employed 1300
108) Using the information in the table above, calculate the employment-to-population ratio.
A) 75 percent
B) 65 percent
C) 50 percent
D) 23.2 percent
bComponent Number of people
(millions)
Total population 246
Working-age population 207
Labor force 139
Employed 133
Unemployed 6
109) Using the information in the above table, the unemployment rate is
A) 4.5 percent.
B) 4.3 percent.
C) 2.8 percent.
D) 6.0 percent.
aComponent Number of people
(millions)
Total population 246
Working-age population 207
Labor force 139
Employed 133
Unemployed 6
110) The labor force participation rate is
A) 67.1 percent.
B) 64.0 percent.
C) 95.7 percent.
D) 56 percent.
bComponent Number of people
(millions)
Total population 246
Working-age population 207
Labor force 139
Employed 133
Unemployed 6
111) The employment-to-population ratio is
A) 67 percent.
B) 64 percent.
C) 50 percent.
D) 62 percent.
c112) An individual who has stopped looking for a job but has looked in the past and still wants a job is referred to as
A) a contingent worker.
B) a productive worker.
C) a marginally attached worker.
D) an unemployed worker.
c113) An individual who has stopped looking for a job because he is convinced that he cannot find a job is referred to as
A) a contingent worker.
B) a productive worker.
C) a discouraged worker.
D) an unemployed worker.
d114) A discouraged worker ________ counted as officially unemployed and ________ counted as in the labor force.
A) is; is
B) is; is not
C) is not; is
D) is not; is not
d115) Discouraged workers ________ counted as officially unemployed because they ________.
A) are; are not working
B) are; are still in the labor force
C) are not; are not qualified to work
D) are not; are not actively
d116) During a recession, the ________.
A) number of discouraged workers decreases
B) unemployment rate decreases
C) employment-to-population ratio increases
D) number of marginally attached workers increases
a117) Including marginally attached workers in the calculation of the unemployment rate would
A) increase the reported rate.
B) lower the reported rate.
C) not change the reported rate.
D) change the reported rate, but in an unpredictable manner.
a118) When an individual who has not been working but has been looking for work decides to terminate the search process, the official unemployment rate
A) will fall.
B) will rise.
C) will remain unchanged.
D) may fall or rise depending on whether or not the individual resumes his education.
d119) Marginally attached workers fall into which of the following population categories?
A) employed
B) unemployed
C) labor force
D) not in the labor force
a120) In August 2012, 40 percent of unemployed workers had been unemployed for 6 months or more. This long-term unemployment is of particular concern because
A) long-term unemployment is the most costly type of unemployment.
B) the U-3 unemployment rate no longer includes these workers in the measurement since they are long-term unemployed.
C) the employment-to-population ratio no longer includes these workers in the measurement since they are long-term unemployed.
D) the labor force participation rate no longer includes these workers in the measurement since they are long-term unemployed.
d121) Who of the following is counted as unemployed?
A) Rene, a retired chemist
B) Homer, a full-time student at a vocational school
C) Kim, a worker on strike from her company for a week
D) Glenn, a student who just graduated from college last week and is currently looking for a job
b122) In a country with a working-age population of 150 million, 120 million workers are employed and 10 million workers are unemployed. What is the size of the labor force?
A) 150 million
B) 130 million
C) 120 million
D) 10 million
b123) In a country with a working-age population of 300 million, 230 million workers are employed and 40 million workers are unemployed. What is the labor force participation rate?
A) 100 percent
B) 90 percent
C) 65 percent
D) 5 percent
c124) In a country with a working-age population of 100 million, 70 million workers are employed and 5 million workers are unemployed. What is the labor force participation rate?
A) 70 percent
B) 5 percent
C) 75 percent
D) 7 percent
d125) In a country with a working-age population of 130 million, 90 million workers are employed and 10 million workers are unemployed. What is the unemployment rate?
A) 5.0 percent
B) 7.1 percent
C) 7.7 percent
D) 10.0 percent
d1) Bob inherits a large sum of money from his dead uncle’s estate. Bob decides to retire young, so he quits his job and heads to the Bahamas. Bob is an example of
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) None of the above is correct.
d2) The three types of unemployment are
A) voluntary, involuntary, and structural.
B) voluntary, part-time, and cyclical.
C) frictional, part-time, and involuntary.
D) frictional, structural, and cyclical.
c3) Frictional unemployment
A) includes discouraged workers.
B) is voluntary part-time unemployment.
C) is unemployment associated normal labor turnover.
D) is unemployment associated with declining industries.
b4) Frictional unemployment is
A) unemployment associated with business cycle recessions.
B) unemployment associated with the changing of jobs in a changing economy.
C) long-term unemployment.
D) unemployment associated with declining industries.
b5) This type of unemployment reflects the normal amount of unemployed workers who possess skills that will enable them to find another job.
A) cyclical unemployment
B) frictional unemployment
C) structural unemployment
D) None of the above answers is correct.
a) Frictional unemployment includes
A) unemployment caused by normal labor turnover associated with people leaving and entering the labor force.
B) unemployment caused by industries moving overseas to better meet foreign competition.
C) unemployment caused by a lack of education so that workers do not possess necessary job skills.
D) unemployment caused by automation of the work place that displaces unskilled workers.
b7) Unemployment caused by the normal labor turnover is called ________ unemployment.
A) part-time
B) frictional
C) involuntary
D) cyclical
b8) Frictional unemployment is the result of
A) technological change or foreign competition.
B) normal labor market turnover.
C) a slowdown in the rate of economic expansion.
D) irresponsible workers with poor work habits.
d9) Which of the following correctly describes “frictional unemployment”?
A) Frictional unemployment is due mainly to job losers.
B) Frictional unemployment is due mainly to job leavers.
C) Frictional unemployment occurs mainly during recessions.
D) Frictional unemployment is a normal occurrence in a growing economy.
c10) Frictional unemployment comes about because of
A) friction between labor and management.
B) a mismatch between skills and available jobs.
C) normal labor market turnover.
D) a general economic slowdown.
a11) The type of unemployment created by the normal rate of reentry and entry into the labor force is
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) seasonal unemployment.
c12) Unemployment caused by people voluntarily leaving their jobs is classified as
A) part-time unemployment.
B) cyclical unemployment.
C) frictional unemployment.
D) seasonal unemployment.
b13) Suppose the country of Tiny Town experienced frictional unemployment. This frictional unemployment would
A) definitely signal that the country is in a recession.
B) be considered a natural occurrence in a growing economy.
C) signal that there are more job leavers than job losers.
D) signal that the number of discouraged workers is growing.
b14) When an individual is frictionally unemployed, the unemployment arises in part from
A) a short-term elimination of jobs because of a slowdown in business activity.
B) individuals searching for appropriate employment.
C) the permanent elimination of jobs because of a change in the structure of the economy.
D) a reduction in the overall demand for workers’ skills.
b15) Frictional unemployment increases when
A) real GDP decreases and the unemployment rate rises.
B) the number of workers who quit one job to find another increases.
C) discouraged workers drop out of the work force.
D) workers are replaced by machines and the unemployed workers do not have the skills to perform new jobs.
c16) To prevent frictional unemployment, we would have to
A) eliminate recessions.
B) eliminate the business cycle.
C) prevent people from leaving their jobs.
D) make sure everyone goes to college.
a17) A person quits her job in order to spend time looking for a better-paying job. This type of unemployment is an example of
A) frictional unemployment.
B) cyclical unemployment.
C) seasonal unemployment.
D) structural unemployment.
d18) An individual with good job prospects who is between jobs is best considered as
A) structurally unemployed.
B) cyclically unemployed.
C) not in the labor force.
D) frictionally unemployed.
d19) A recent accounting graduate from a major business school is searching for a place to begin his career as an accountant. This individual is best considered as
A) structurally unemployed.
B) seasonally unemployed.
C) cyclically unemployed.
D) frictionally unemployed.
d20) When a worker quits a job to look for a better job,
A) structural and cyclical unemployment increase.
B) structural unemployment decreases.
C) cyclical unemployment increases.
D) frictional unemployment increases.
d21) When a woman reenters the labor force and looks for a job after spending time at home raising a child,
A) cyclical unemployment increases.
B) structural unemployment decreases.
C) frictional and cyclical unemployment increase.
D) frictional unemployment increases.
c22) Students who leave school in the spring and look for work are one source of ________.
A) structural unemployment
B) cyclical unemployment
C) frictional unemployment
D) business-cycle fluctuations
c23) When a student finishes college and begins looking for work,
A) cyclical unemployment increases.
B) structural unemployment increases.
C) frictional unemployment increases.
D) frictional and cyclical unemployment increase.
b24) Which of the following most likely would decrease frictional unemployment?
A) an increase in the number of high school and college graduates
B) effective Internet-based employment services and job registries
C) an expansion of unemployment compensation benefits
D) All of the above would decrease frictional unemployment.
c25) Suppose that Matt quits a job with the XYZ Corporation in order to look for more rewarding employment. Matt would be best be considered as
A) still being employed.
B) included in the economy’s “hidden employment.”
C) frictionally unemployed.
D) cyclically unemployed.
a26) Catherine quit her job in order to look for a new one; therefore, she is best considered as
A) frictionally unemployed.
B) structurally unemployed.
C) cyclically unemployed.
D) seasonally unemployed.
a27) Because of a bank merger, Ms. Davis lost her position as Vice President and had to seek work with other banks. Ms. Davis has the skills necessary to find a new job, thus she is best considered as
A) frictionally unemployed.
B) cyclically unemployed.
C) structurally unemployed.
D) naturally unemployed.
a28) Bill loses his job as a loan officer when the bank he works for is bought up by a larger financial institution. Bill has the skills necessary to find a new job, so as Bill searches for work he is best considered an example of
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) a discouraged worker.
b9) The best example of a frictionally unemployed individual is
A) Charles who has lost his job as an autoworker because of increased imports and can’t find a good job that utilizes his skills.
B) Mary who quit her job to find work closer to her home.
C) Sam who lost his job as a real estate salesperson when the housing market went soft because of a recession.
D) Sandy who has few skills and is no longer looking for work.
c30) Structural unemployment is
A) associated with the normal changing of jobs in a dynamic economy.
B) associated with the general downturns in the economy.
C) associated with the general decline of specific industries.
D) almost always short-term in nature.
a31) Structural unemployment is the result of
A) technological change or foreign competition.
B) normal labor market turnover.
C) a slowdown in the rate of economic expansion.
D) irresponsible workers with poor work habits.
c32) Structural unemployment is
A) associated with the changing of jobs in a dynamic economy.
B) associated with general downturns in the economy.
C) associated with changes in technology that change required job skills.
D) very short-term unemployment.
b33) Suppose that over a period of years the country of Quasiland switched from being an agriculturally-based economy to a technologically-based economy. As a result, many people lost jobs because they lacked the correct skills. As they search for new jobs, these people are part of
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) discouraged workers.
d34) An individual is structurally unemployed if
A) there is a recession and the individual is laid off.
B) the individual wants to work just during certain months of the year.
C) the individual quits a job in order to search for a better one.
D) the individual lacks marketable job skills because technology has changed.
c35) Which statement correctly describes “structural unemployment?”
A) Structural unemployment occurs mainly during recessions.
B) Structural unemployment is also called “frictional unemployment.”
C) Structural unemployment occurs even when the economy is at the natural unemployment rate.
D) The amount of structural unemployment depends on normal labor turnover.
a36) Unemployment caused by changes in technology is called ________ unemployment.
A) structural
B) frictional
C) techno
D) cyclical
c37) Structural unemployment
A) falls during the expansion phase of the business cycle.
B) falls as the pace of technological progress increases.
C) generally lasts longer than frictional unemployment.
D) falls when the government provides more generous unemployment compensation benefits.
b38) Suppose that the number of jobs in the fishing industry decreases but the number of jobs in the travel industry increases. Initially, ________.
A) the economy remains at full employment
B) structural unemployment increases
C) there is a shortage of workers in both sectors
D) cyclical unemployment increases
b39) When the automobile replaced horse-drawn carriages as the principal means of transportation, firms producing horse-drawn carriages went bankrupt and permanently laid off all their workers, thereby increasing
A) frictional unemployment.
B) structural unemployment.
C) frictional and cyclical unemployment.
D) cyclical unemployment.
d40) The nation’s structural unemployment will increase when
A) bad economic policies send the economy into a recession.
B) there is influx into the labor market of new college graduates.
C) there is an increase in post-Christmas layoffs of workers.
D) an increase in textile imports displaces older textile workers who do not have the skills necessary to find new jobs.
d41) A major characteristic of structural unemployment that differentiates it from frictional unemployment is that structural unemployment
A) exists only during a recession.
B) exists in an expansion whereas there is no frictional unemployment in an expansion.
C) is a short-term problem.
D) usually lasts longer than frictional unemployment.
b42) When the economy switches production toward services and away from manufacturing and workers in the manufacturing industry are permanently laid off,
A) frictional unemployment decreases.
B) structural unemployment increases.
C) cyclical unemployment increases.
D) frictional and cyclical unemployment increase.
b43) Suppose the country of Tiny Town decided to open its borders to free trade. As a result, a number of its workers lost their jobs to international competition and can’t find new jobs because their skills don’t match what is required for job openings. The workers who lost their jobs and searched for new ones are best be considered part of
A) frictional unemployment.
B) structural unemployment
C) cyclical unemployment.
D) discouraged workers.
b44) In the 1990s, video recordings were made primarily on tapes. However, in the 2000s DVDs became increasingly popular, leading to a sharp decline in video tapes. As a result, many people who manufactured tapes lost their jobs and didn’t have the skills necessary to work making DVDs. This occurrence is best consider an example of
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) underemployment.
d45) How would you best describe a manufacturing employee who has been fired because he was replaced by a robot (new technology) and does not have the skills necessary to help operate the robot?
A) job leaver
B) entrant/reentrant
C) cyclically unemployed
D) structurally unemployed
c46) Which of the following individuals is the best example of a structurally unemployed worker?
A) a recent college graduate who has entered the labor force
B) an individual who has been laid off from his job because of a business cycle recession
C) an automobile worker who has lost her job because of an increase in automobile imports and does not have the skills currently needed by businesses
D) an individual who quits one job in the hope of finding a better job
c47) Ms. Krupsky has shorthand and typing skills and still finds herself unemployed. In today’s economy, Ms. Krupsky is an example of what type of unemployment?
A) cyclical unemployment
B) frictional unemployment
C) structural unemployment
D) None of the above answers is correct.
d48) Andrew just lost his job as a corkscrew operator since his company has found a machine to perform his work tasks. Andrew did not have the skills needed to operate the machine. Andrew has searched for a new job for 6 months and continues to search. Therefore, Andrew is considered to be
A) frictionally unemployed.
B) a discouraged worker.
C) cyclically unemployed.
D) structurally unemployed.
b49) Nicholas does not possess marketable job skills; therefore, he is
A) frictionally unemployed.
B) structurally unemployed.
C) cyclically unemployed.
D) seasonally unemployed.
cPerson A This person has just graduated from high school and is working at a part-time job but wants a full-time job.
Person B At the age of 45, this person was laid off from the automobile industry when new equipment was installed and the person did not have the skills necessary to use the equipment. This person now is searching to find a new job.
Person C As a result of this person’s spouse being transferred to a job in a new city, this person is looking for a new job.
Person D This person just graduated from college and is looking for an engineering job. In the meantime, this person is working full-time waiting tables.
50) The above table shows answers given by people interviewed in the Current Population Survey. Which people are structurally unemployed?
A) A, B, C, and D
B) A, B, and C
C) B and C.
D) A, B, and D
dPerson A This person has just graduated from high school and is working at a part-time job but wants a full-time job.
Person B At the age of 45, this person was laid off from the automobile industry when new equipment was installed and the person did not have the skills necessary to use the equipment. This person now is searching to find a new job.
Person C As a result of this person’s spouse being transferred to a job in a new city, this person is looking for a new job.
Person D This person just graduated from college and is looking for an engineering job. In the meantime, this person is working full-time waiting tables.
51) The above table shows answers given by people interviewed in the Current Population Survey. Which person is cyclically unemployed?
A) A
B) B
C) C
D) None of the people
d52) Cyclical unemployment
A) is due mainly to job leavers.
B) may increase or decrease during an expansion.
C) occurs when technology improvements change job requirements.
D) fluctuates over the business cycle.
a53) Which type of unemployment increases during a recession?
A) cyclical unemployment
B) frictional unemployment
C) structural unemployment
D) the natural unemployment rate
d54) Cyclical unemployment
A) is always present in an economy.
B) is higher during an expansion.
C) decreases during a recession.
D) fluctuates over the business cycle.
c55) Cyclical unemployment is the result of
A) technological change or foreign competition.
B) normal labor market turnover.
C) the business cycle.
D) irresponsible workers with poor work habits.
d56) Cyclical unemployment occurs when
A) individuals enter into the labor market making the rounds of potential employers.
B) individuals with skills no longer valued in the labor market cannot find employment.
C) individuals give up the search for employment.
D) a business cycle recession decreases employment.
d57) Unemployment caused by the fluctuation of the business cycle is called ________ unemployment.
A) structural
B) recession-related
C) frictional
D) cyclical
b58) Unemployment that is the result of recessions is called
A) frictional unemployment.
B) cyclical unemployment.
C) downtime unemployment.
D) structural unemployment.
c59) Suppose the country of Quasiland experienced a decrease in real GDP and people were laid off from their jobs. The people would be considered part of
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) discouraged workers.
b60) The primary factor leading to cyclical unemployment is when
A) businesses often discriminate in their hiring practices on the basis of age, sex, and race.
B) the level of overall economic activity fluctuates.
C) workers quit their jobs in order to look for higher paying employment.
D) some workers do not have marketable job skills.
d61) If a worker is temporarily laid off because the economy is in a recession,
A) frictional unemployment increases.
B) structural unemployment increases.
C) the size of the labor force rises.
D) cyclical unemployment increases.
a62) A recession causes a decrease in the demand for housing, resulting in substantial layoffs in the construction industry. The people laid off are considered
A) cyclically unemployment.
B) frictionally unemployment.
C) seasonally unemployment.
D) structurally unemployment.
c63) If the economy enters an expansion,
A) cyclical unemployment increases.
B) structural unemployment increases.
C) cyclical unemployment decreases.
D) structural unemployment decreases.
b64) Cyclical unemployment
A) is the major part of the natural unemployment rate.
B) decreases during economic expansions.
C) rises as a result of increased international competition.
D) falls when unemployment compensation payments are increased.
b65) During an economic expansion, real GDP ________ and unemployment ________.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
b66) An observer of the economy notices that over the past 12 months the unemployment rate has fallen from 7.0 percent to 6.5 percent. During the same time, the rate of growth in real GDP has been positive. From this information we might conclude that
A) inflation is not occurring.
B) an expansion is occurring in the economy.
C) a recession is in progress.
D) a trough in the business cycle will soon be reached.
a67) Cyclical unemployment ________.
A) decreases during an expansion
B) grows at the same rate as potential GDP
C) is zero at a business-cycle trough
D) decreases during a recession
c68) Cyclical unemployment ________ during expansions and ________ during recessions.
A) increases; increases
B) increases; decreases
C) decreases; increases
D) decreases; decreases
b69) Auto and steel workers commonly experience this type of unemployment in a recession.
A) frictional unemployment
B) cyclical unemployment
C) structural unemployment
D) natural unemployment rate
c70) If the economy enters a recession,
A) frictional unemployment increases.
B) structural unemployment decreases.
C) cyclical unemployment increases.
D) the number of workers on layoff decreases.
c71) Recessions and expansions affect most strongly which type of unemployment?
A) frictional unemployment
B) structural unemployment
C) cyclical unemployment
D) seasonal unemployment
b72) Mike has just been laid off from his construction job because consumers are not purchasing new homes because of the recession. Mike would be considered to be part of
A) structural unemployment.
B) cyclical unemployment.
C) seasonal unemployment.
D) frictional unemployment.
c73) Bill is a high-school drop out who lost his job in a fast food restaurant when the economy plunged into a recession. After 8 months, Bill is still looking for work. He is an example of
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) the natural unemployment rate
a74) The best example of a cyclically unemployed individual is
A) Charles who lost his job as a real estate salesperson when the housing market went soft because of a recession.
B) Alice who quit her job to enter college.
C) Mary who lost her job in the textile industry following a decrease in the tariff on textiles.
D) Bob who has just graduated from college and is entering the labor market.
c75) Which of the following situations best describes an individual who is cyclically unemployed?
A) Catherine is a ski instructor who is not working because it is summer.
B) Matthew was an artillery man, but he has been unable to find work since he left the army.
C) Nicholas was laid-off when orders for General Motors cars fell during a recession.
D) Susan quit her job as a preschool teacher to try to find a better paying job.
b76) Full employment occurs when
A) structural unemployment is zero.
B) cyclical unemployment is zero.
C) frictional unemployment is zero.
D) cyclical and frictional unemployment are zero.
a77) Full employment occurs when
A) there is no cyclical unemployment.
B) there is no unemployment.
C) there is no frictional unemployment.
D) the unemployment rate is less than 5 percent.
b78) Full employment means that
A) no one is unemployed.
B) there is no cyclical unemployment.
C) there is no cyclical or frictional unemployment.
D) there is no structural or frictional unemployment.
b79) The economy is at full employment when
A) there are no unemployed workers.
B) all unemployment is frictional or structural.
C) there are fewer unemployed workers than available jobs.
D) all unemployment is cyclical.
a80) Full employment occurs when the
A) unemployment rate equals the natural unemployment rate.
B) structural unemployment rate equals the frictional unemployment rate.
C) natural unemployment rate equals the frictional unemployment rate.
D) cyclical unemployment rate equals the natural unemployment rate.
b81) Full employment occurs
A) only if the unemployment rate is zero.
B) only if the unemployment rate is equal to the natural unemployment rate.
C) only if unemployment is equal to structural unemployment plus cyclical unemployment.
D) None of the above answers are correct.
b82) When the economy is at full employment the
A) natural unemployment rate is equal to 0 percent.
B) natural unemployment rate equals the unemployment rate.
C) natural unemployment rate is equal to 10 percent.
D) unemployment rate is equal to 0 percent.
c83) An economy is at full employment when ________.
A) the unemployment rate is zero
B) there is no frictional unemployment
C) the unemployment rate equals the natural unemployment rate
D) there is no structural unemployment
d84) Suppose the natural unemployment rate equals 6 percent and the current unemployment rate is 8 percent. We can conclude that
A) there is no structural unemployment.
B) there is no frictional unemployment.
C) there is no cyclical unemployment.
D) full employment is not occurring.
c85) Full employment means
A) zero unemployment.
B) only cyclical unemployment exists.
C) only frictional and structural unemployment exists.
D) None of the above answers are correct.
c86) When economists speak of full employment, they refer to the case in which the sum of frictional and structural unemployment is
A) falling over time.
B) equal to zero.
C) equal to the actual amount of unemployment.
D) greater than the level of deficient demand unemployment.
b87) When the economy is operating at full employment, the natural unemployment rate consists of only
A) cyclical unemployment.
B) frictional and structural unemployment.
C) frictional and cyclical unemployment.
D) structural and cyclical unemployment.
c88) An unemployment rate of zero percent cannot be expected because
A) there are some people who do not want to work.
B) there will always be discouraged workers.
C) some portion of the labor force will always be between jobs.
D) cyclical unemployment will always exist.
d89) The natural unemployment rate
I. occurs when only there is no cyclical unemployment present.
II. is the unemployment rate when the economy is at potential GDP.
A) I only.
B) II only
C) neither I nor II.
D) I and II
b90) The natural unemployment rate
A) falls with an increase in cyclical unemployment.
B) rises with an increase in structural unemployment.
C) rises with an increase in cyclical unemployment.
D) rises with a decrease in frictional unemployment.
c91) The unemployment rate is at the natural unemployment rate when
A) frictional unemployment equals zero.
B) structural unemployment equals zero.
C) cyclical unemployment equals zero.
D) all types of unemployment equal zero.
c92) The natural unemployment rate is the unemployment rate that exists when there is no
A) structural unemployment.
B) frictional unemployment.
C) cyclical unemployment.
D) cyclical or structural unemployment.
d93) When cyclical unemployment is zero,
A) frictional unemployment is zero.
B) cyclical and frictional unemployment are zero.
C) structural unemployment is zero.
D) the unemployment rate equals the natural unemployment rate.
c94) The natural unemployment rate
A) is a constant figure of about 4 percent.
B) fluctuates with the rate of inflation.
C) is the unemployment rate that occurs when the economy is at full employment.
D) is equal to cyclical unemployment.
a95) If unemployment is at the natural rate, then there
A) is no cyclical unemployment.
B) is no frictional unemployment.
C) will be cyclical and frictional unemployment but not structural unemployment.
D) will be only cyclical unemployment.
b96) If unemployment equals the natural unemployment rate, then there
A) is zero unemployment.
B) is only frictional or structural unemployment.
C) are no job openings existing at the time.
D) is less than full employment.
c97) The natural unemployment rate
A) occurs when the unemployment rate is 0 percent.
B) is the unemployment rate when there is no structural unemployment.
C) is the unemployment rate at full employment.
D) is the unemployment rate when there is only cyclical unemployment.
d98) Full employment exists when
A) there is only frictional and structural unemployment.
B) the economy is at the natural unemployment rate.
C) there is no cyclical unemployment.
D) All of the above answers are correct.
a99) When the economy moves into and out of recessions and expansions, the unemployment rate fluctuates around the
A) natural unemployment rate.
B) structural unemployment rate.
C) cyclical unemployment.
D) frictional unemployment rate.
c100) The natural unemployment rate ________.
A) is the same from year to year
B) is greater than the actual rate of unemployment
C) is the unemployment rate when there is no cyclical unemployment
D) equals zero
d101) When cyclical unemployment increases and other things remain the same, ________.
A) the natural unemployment rate increases
B) the amount of frictional unemployment increases
C) the amount of structural unemployment decreases
D) the natural unemployment rate does not change
a102) The relationship between the unemployment rate and the natural unemployment rate is that the unemployment rate
A) fluctuates about the natural rate.
B) equals the natural rate.
C) is always below the natural rate.
D) is always above the natural rate.
b103) Suppose the economy is experiencing frictional unemployment of 1 percent, structural unemployment of 3 percent and cyclical unemployment of 4 percent. What is the natural unemployment rate?
A) 3 percent.
B) 4 percent.
C) 5 percent.
D) 7 percent.
b104) Suppose that the natural unemployment rate is 4.5 percent and the actual unemployment rate is 3.5 percent. Then cyclical unemployment is
A) 1 percent.
B) -1 percent.
C) 8 percent.
D) 0 percent.
b105) The natural unemployment rate
A) estimated to be close to 9 percent in recent years in the United States.
B) has been estimated to range between 4 percent and 6 percent in the United States in recent years.
C) is attained whenever the unemployment rate is less than 5 percent because 95 percent employment is considered full employment.
D) occurs when 100 percent of the labor force is employed.
d106) Cyclical unemployment exists when
A) frictional and structural unemployment is zero.
B) real national income exceeds potential income.
C) real GDP exceeds potential GDP.
D) real GDP is less than potential GDP.
a107) When real GDP is ________ potential GDP, the unemployment rate is ________ the natural unemployment rate.
A) greater than; less than
B) less than; equal to
C) equal to; greater than
D) greater than; greater than
c108) Suppose that the unemployment rate equals 4.5 percent and that the natural unemployment rate is 5.5 percent. We can conclude that
A) the output gap is negative.
B) the output gap equals zero.
C) the output gap is positive.
D) we have mismeasured the natural unemployment rate.
a109) In September 2012 the U.S. unemployment rate was 7.8 percent while the natural unemployment rate was 6 percent. The U.S. economy
A) had a negative output gap.
B) had a positive output gap.
C) had an output gap of zero.
D) was at full employment.
a10) When the unemployment rate is less than the natural unemployment rate,
A) the output gap is positive.
B) the output gap equals zero.
C) the output gap is negative.
D) None of the above is possible because it is impossible for the unemployment rate to be less than the natural rate.
b111) When more labor is unemployed than the amount at the natural unemployment rate, then real GDP ________ potential GDP.
A) is equal to
B) is less than
C) is greater than
D) cannot be compared to
d112) The unemployment rate generally falls during ________ in the business cycle.
A) a peak
B) a recession
C) a trough
D) an expansion
c113) At the natural unemployment rate, there is no
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) unemployment.
d114) If the economy is at full employment,
A) the entire population is employed.
B) the entire labor force is employed.
C) the only unemployment is frictional unemployment plus discouraged workers.
D) real GDP equals potential GDP.