Unemployment and Inflation - Chapter 8 Unemployment and Inflation 8.1 Measuring the Unemployment Rate and the Labor Force Participation Rate 1 The

# Unemployment and Inflation - Chapter 8 Unemployment and...

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Chapter 8 Unemployment and Inflation8.1 Measuring the Unemployment Rate and the Labor Force Participation Rate 1) The Bureau of Labor Statistics would categorize a retiree who is not working as A) employed.B) unemployed.C) a discouraged worker.D) out of the labor force.Answer: DComment: RecurringDiff: 1Page Ref: 640/236Topic: The Household SurveyObjective: LO1: Define unemployment rate and labor force participation rate and understand how they are computed.AACSB: Reflective ThinkingSpecial Feature: None 2) Suppose that homemakers are included as employed in the labor force statistics, rather than being counted as out of the labor force. This would Table 8-1Total population20,000Working-age population15,000Employment1,000Unemployment100Consider the data above for a simple economy.3) Refer to Table 8-1. The unemployment rate for this simple economy equals
4) Refer to Table 8-1. The labor force participation rate for this simple economyequals 5) Suppose the labor force stays constant, and the working-age population staysconstant, but a greater number of persons who were unemployed become employed.The labor force participation rate will A) increase.B) decrease.C) remain constant. (Recall that labor force participation rate is the percentage of theworking-age population in the labor force. Here both numerator and denominatorremain unchanged. However, the unemployment rate will decrease in this case. Why?)D) not change in a way that can be predicted.