Chapter 7: Unemployment

Question 1

Beureau of Labor Statistics (BLS)

Answer 1

• Calculates unemployment rate for previous month each month

- Uses the household survey

Question 2

Employed

Answer 2

Anyone 16 or older who:

1) works 1 hour or more per week for pay or
2) works 15 or more hours a week without pay in a family enterprise or
3) has a job but is temporarily absent from work

Question 3

Unemployed

Answer 3

Anyone 16 or older who is (all of the following)

1) Not working
2) available for work
3) has made specific efforts to find work

Question 4

Not in the labor force

Answer 4

Anyone who is not looking for work because they do not want a job or have given up looking (discouraged worker)

Question 5

Labor force

Answer 5

= Employed + unemployed

= Labor force participation rate x total population

Question 6

Total population

Answer 6

= Labor force (employed + unemployed) + not in the labor force

Question 7

Unemployment rate

Answer 7

= unemployed/(employed + unemployed)

Question 8

Labor force participation rate

Answer 8

= labor force (employed + unemployed)/ total population (labor force [employed + unemployed] + not in the labor force)

Question 9

Discouraged worker effect

Answer 9

The decrease in the unemployment rate due to people who want to work but can’t find jobs grow discouraged and stop looking thus dropping out of the ranks of unemployed and the labor force

Question 10

Classifying discouraged workers as unemployed would

Answer 10

Raise the unemployment rate