# Chapter 12 Unemployment and Inflation

| November 9, 2018

31)
Recall the Application. Assume 5,000 unemployed workers left the workforce to
participate in the federal Disability Insurance program, leaving the size of
the labor force at 195,000. If 13,000 workers remain unemployed and in the
labor force, what was the unemployment rate before and after the 5,000 unemployed
workers left the workforce?
A)
9.0%; 6.7%
B)
6.5%; 2.3%
C)
12.8%; 4.3%
D)
38.5%; 27.8%

32)
The unemployment rate
A)
rises during booms and falls during recessions.
B)
rises during recessions and falls during booms.
C)
rises during times of rapid economic growth and falls during times of slow
economic growth.
D)
tends to remain the same in booms and recessions.

A)
adjust for the predictable summer increase in the unemployment rate for teenagers.
B)
adjust for the predictable summer decrease in the unemployment rate for
teenagers.
C)
are the same as the unadjusted rates in periods of bad weather.
D)
are not calculated for the U.S. economy.

34)
The unemployment rate is calculated by dividing the number unemployed and
looking for work by the sum of the number employed and the number unemployed
and looking for work.

35)
Individuals who are not working and are not actively looking for work are
counted as unemployed if they have looked for work in the past.

36)
The labor force participation rate is the fraction of the population over 16
years of age that is looking for work.

37)
A person who is not working and who has looked for work in the past, but is not
looking for work now is not considered “unemployed.”

38)
If a person without a job is not actively looking for work, that person is
classified as not being in the labor force.

39)
If a large number of people are classified as being out of the labor force when
they are really looking for work, this will lead to an official unemployment
rate that is lower than the true unemployment rate.

40)
People who stopped looking for work because they could not find jobs are called
discouraged workers.

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