Question

25. What does BLS say is the current natural rate of unemployment?   
     
          4.0%
          5.5%
          10.2%
          Trick question: BLS does not provide a measure of the natural rate



26. Which of the following are reasons why the official unemployment rate understates economic hardship? (check all that apply)
     
          Doesn`t take into account discouraged workers
          Doesn`t take into account if there are other wage earners in the household
          Doesn`t take into account the working poor
          Doesn`t take into account underemployment
          Doesn`t take into account if the unemployed person is eligible for unemployment insurance support

           

27. Assume that 1,140 persons are employed, 60 persons are unemployed, and 800 persons are not in the labor force.  
    What is the unemployment rate?
  
                
           

28. Assume that 2,250 persons are employed, 250 persons are unemployed, and 1,500 persons are not in the labor force.  
    What is the labor force participation rate?
  
                


29. Which of the following persons are underemployed? (check all that apply)
     
          A college graduate with a degree in education who is substitute teaching
          A high school student who occasionally babysits for pocket cash
          A low-skilled worker receiving the minimum wage
          A part-time worker who wants a full-time job but can`t find it



30. I`m a construction worker in Alaska. I don`t work during January and February because the weather is so harsh that outside work is impossible.  
    What type of unemployment do I have in January and February?   
     
          Cyclical
          Frictional
          Seasonal
          Structural

Answer 1

26) Which of the following are reasons why the official unemployment rate understates economic hardship?

• Doesn`t take into account discouraged workers.
• Doesn`t take into account underemployment.

27) Given:

Employed persons- 1,140

Unemployed persons- 60

Not in labour force- 800

Formula for calculating Unemployment rate-

Unemployed persons / Labour force × 100

Labour force is calculated by adding the total number of employed and unemployed persons.

Here, labour force= 1,140+ 60= 1200

Putting values in the formula-

60/1200 × 100 = 5%

28) Given:

Employed persons- 2,250

Unemployed persons- 250

Not in labour force- 1,500

Formula for calculating Labour force participation rate (LFPR)-

Labour force / Total population ×100

Labour force= employed persons + unemployed persons

Labour force= 2,250+250= 2,500

Total population will be calculated by adding labour force and Not in labour force

Total population= 2,500 + 1,500= 4,000

LFPR= 2,500/ 4000 × 100

= 62.5%

29) Underemployment means all the persons who are highly skilled and can do a high paying job but due to lack of jobs, he is forced to work in a low wage job and all the persons who are willing to do full time job but works in a part time job.

Here in this question the following two options will be in the category of underemployed-

• A college graduate with a degree in education who is substitute teaching-

Substitute teacher means when a person teaches in the place of another person who is currently unavailable.

In this case the person is with a degree of education and he can teach for a high paying job in a top school or college but he is a substitute teacher.

• A part-time worker who wants a full-time job but can't find it-

This time people are categorised under "underemployment".

30) The answer is Seasonal unemployment.

Seasonal unemployment occurs when a person is unemployed or not working for some months of the year.