77) 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.
78) 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.
79) 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.
80) 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.
81) From 1980 to 2000 the employment-to-population ratio generally ________ and from 2000
to 2014 the ratio generally ________.
A) increased; decreased
B) decreased; decreased
C) increased; increased
Total
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
82) The labor force participation rate is the ratio of
A) (the labor force divided by the working-age population) multiplied by 100.
B) (the number of unemployed divided by the working-age population) multiplied by 100.
C) (the labor force divided by the total population) multiplied by 100.
D) (the number of unemployed divided by the labor force) multiplied by 100.
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.
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
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.
86) From 1980 to 2000 the labor force participation rate generally ________ and from 2000 to
2014 the rate generally ________.
A) increased; decreased
B) decreased; decreased
C) increased; increased
D) decreased; increased
87) 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
88) 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.
89) In September 2014, the labor force participation rate fell from 62.8 percent to 62.7 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.
90) 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
91) 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.
92) 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
93) 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.
94) 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.
95) 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
96) 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.
Category
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.
98) In the above table, the size of the labor force is
A) 210 million.
B) 155 million.
C) 140 million.
D) 100 million.
99) In the above table, the unemployment rate is
A) 6 percent.
B) 24 percent.
C) 18 percent.
D) 29 percent.
100) In the above table, the labor force participation rate is
A) 55 percent.
B) 44 percent.
C) 62 percent.
D) 69 percent.
101) In the above table, the employment-to-population ratio is
A) 51 percent.
B) 42 percent.
C) 62 percent.
D) 44 percent.
102) In the above table, the number of marginally attached workers is
A) 40 million.
B) 55 million.
C) 15 million.
Number of people
(millions)
50
90
30
40
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.
104) Using the data in the above table, the labor force is ________ million.
A) 215
B) 120
C) 125
D) 165
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.
Number of
people
2600
2000
500
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
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
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
Number of people
(millions)
246
207
139
133
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.
110) The labor force participation rate is
A) 67.1 percent.
B) 64.0 percent.
C) 95.7 percent.
D) 56 percent.
111) The employment-to-population ratio is
A) 67 percent.
B) 64 percent.
C) 50 percent.
D) 62 percent.
112) 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.
113) 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.
114) 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
115) 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 seeking work
116) 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
117) 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.
118) 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.
119) Marginally attached workers fall into which of the following population categories?
A) employed
B) unemployed
C) labor force
D) not in the labor force
120) In September 2014, 32 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.
121) 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
122) 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
123) 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
124) 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
125) 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
2 Unemployment and Full Employment
1) 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.
2) 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.
3) 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.
4) 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.
5) 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.
6) 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.
7) Unemployment caused by the normal labor turnover is called ________ unemployment.
A) part-time
B) frictional
C) involuntary
D) cyclical
8) 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.
9) 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.
10) 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.
11) 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.
12) Unemployment caused by people voluntarily leaving their jobs is classified as
A) part-time unemployment.
B) cyclical unemployment.
C) frictional unemployment.
D) seasonal unemployment.
13) 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.
14) 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.
15) 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.
16) 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.
17) 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.
18) 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.
19) 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.
20) 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.
21) When a person 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.
22) 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
23) 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.
24) 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.
25) Suppose that Matt quits a job with the XYZ Corporation in order to look for more rewarding
employment. Matt is best be considered as
A) still being employed.
B) included in the economy’s “hidden employment.”
C) frictionally unemployed.
D) cyclically unemployed.
26) 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.