Question

17.

Refer to the scenario to answer the following questions.
A government worker surveys a number of households and comes up with the following information: there were a total of 90 people in the households, 10 of the people were children under 16, 10 of the people were retired but still capable of working, 35 people had full-time jobs, 5 had part-time jobs, 5 were stay-at-home parents, 5 were full-time students over the age of 16, 5 were disabled people who could not work, 10 people had no job but were looking for jobs, and there were 5 people who wanted a job but were not looking for a job.

According to the information in the survey, the unemployment rate is

10 percent.

27.3 percent.

20 percent.

37.5 percent.

25 percent.

19.

Due to the rising cost of a college education, a greater percentage of students have part-time jobs in comparison to past years. All else the same, this decrease in the number of full-time students can be expected to ________ the labor force participation rate and ________ the unemployment rate.

increase; have no effect on

have no effect on; have no effect on

increase; increase

decrease; decrease

increase; decrease

Answer 1

17.

The unemployment rate is given by = (number of unemployed persons divided by the labor force) x 100

Labor Force is given by the sum of employed and unemployed people.

The number of unemployed individuals includes people aged 16 and older who don't have a job but are looking for a job.

So, labor force =35 people with full-time jobs + 5 people with part-time jobs + 10 people who had no job but were looking for jobs.

Number of unemployed persons = 10

(Number of unemployed persons will not include those who are NOT looking for a job. Persons who are neither employed nor unemployed are not included in the labor force. This category includes retired persons, students, stay at home parents, and others who are neither working nor seeking work).

So, unemployment rate = (10 / 50)x 100 = 20.

hence, the correct answer is 20%.

18.

Due to the rising cost of a college education, a greater percentage of students have part-time jobs in comparison to past years. All else the same, this decrease in the number of full-time students can be expected to increase the labor force participation rate and decrease the unemployment rate.

This is because students who are working part time have now entered the labor force , thereby increasing the labor participation rate.

The unemployment rate will automatically fall as the people in the labor force has increased, thereby increasing the denominator in the UNEMPLOYMENT RATE FORMULA given above .