Quiz Five

Question 1

Employed person

Answer 1

Has worked the week prior to the survey or if they were temporarily away from their jobs

Question 2

Household survey

Answer 2

Measure used to collect data used to compute unemployment rate by interviewing a sample of households

Question 3

Unemployment

Answer 3

If a person didn’t work in the previous week but were available for work and had actively looked for work at some time over the previous month

Question 4

Labor force

Answer 4

Sum of employed and unemployed workers in the economy

Question 5

Unemployment rate

Answer 5

Percentage of the labor force that’s unemployed

Question 6

Groups who aren’t considered part of the labor force

Answer 6

Retirees, homemakers, students, those in prison or active military service

Unemployed but stopped looking for work, and discouraged workers

Question 7

Discouraged workers

Answer 7

People available for work but who haven’t looked for a job because they believe no jobs are available for them

Question 8

Unemployment rate calculation

Answer 8

Unemployed people/ labor force * 100

Question 9

Labor force participation rate

Answer 9

Labor force/working age population * 100

Question 10

Employment population ratio

Answer 10

Measures % of working age population that’s employed

Employed/ working age population * 100

Question 11

Issues with measuring the unemployment rate

Answer 11

BLS doesn’t reflect the actual state of joblessness in the economy —> overstates

It also counts people as unemployed if they hold part time jobs but want to work full time

Question 12

The higher the labor force participation rate, the ___ labor will be available and the ___ the GDP

Answer 12

More, higher

Question 13

Frictional unemployment

Answer 13

Short term unemployment that arises from the process of matching workers with jobs

Question 14

Seasonal unemployment

Answer 14

Frictional unemployment due to calendar events

Question 15

Structural unemployment

Answer 15

Persistent mismatch between skills/attributes of workers and job requirements

Question 16

Cyclical unemployment

Answer 16

Unemployment caused by a business cycle recession

Question 17

Full employment

Answer 17

The only remaining unemployment is frictional

Question 18

Natural rate of unemployment

Answer 18

Unemployment rate when cyclical unemployment is 0, rate is between 4&5%, and the economy is at full employment

Sum of frictional and structural unemployment

Question 19

Can rGDP exceed potential GDP?

Answer 19

Yes economy can rise above capacity, usually in short bursts when the economy booms

Question 20

Potential GDP

Answer 20

RGDP when all firms operate at capacity

Question 21

Capacity

Answer 21

Maximum possible production at a sustainable pace

Question 22

Marginally attached workers

Answer 22

Those who looked for work in the last year but stopped in the last month, either for non economic reasons or because they became discouraged

Question 23

Underemployment rate calculation

Answer 23

Unemployed + marginally attached + part time, want full / labor force + marginally attached workers

Question 24

Natural unemployment rate calculation

Answer 24

Frictionally and structurally unemployed/ labor force

Question 25

Creative destruction

Answer 25

An industry or business replaces another in search of more profits by introducing new or better products