Understanding Unemployment and Labor Force

What is the labor force participation rate?

• The percentage of the population that is employed

• The percentage of the working-age population that is either employed or actively seeking employment

• The number of unemployed people divided by the total population

• The number of people not in the labor force

What is the formula for calculating the unemployment rate?

Which type of unemployment is caused by workers voluntarily changing jobs and temporarily being unemployed?

• Frictional unemployment

• Structural unemployment

• Cyclical unemployment

• Seasonal unemployment

Structural unemployment occurs when:

• There is a mismatch between workers’ skills and the skills needed for available jobs

• The economy is in a recession

• Workers are between jobs

• There is a temporary decrease in demand for labor

Which of the following best describes cyclical unemployment?

• Unemployment due to changes in the seasons

• Unemployment caused by economic downturns

• Unemployment due to workers voluntarily leaving their jobs

• Unemployment caused by technological changes

If the labor force consists of 1,000 people and 100 are unemployed, what is the unemployment rate?

• 1%

• 10%

• 100%

• 0.1%

Which scenario best illustrates frictional unemployment?

• A factory worker loses their job because the factory closes due to automation

• A recent college graduate is searching for their first job

• A construction worker is laid off during the winter

• A worker is laid off during a recession

A country has a working-age population of 50 million, a labor force of 30 million, and 2 million unemployed people. What is the labor force participation rate?

• 4%

• 6.7%

• 60%

• 66.7%

Which of the following is an example of structural unemployment?

• A teacher looking for a new job after moving to a new city

• A coal miner losing their job because the industry is declining and their skills are not needed elsewhere

• A retail worker laid off after the holiday season

• An office worker temporarily unemployed during a recession

If the unemployment rate increases, which of the following is a likely impact on the economy?

• Increased consumer spending

• Decreased government spending

• Lower overall production of goods and services

• Higher tax revenues