CLEP Macroeconomics chapter practice4 questions

08 Employment, Unemployment, and the Labor Force

These questions come directly from the chapter practice in the book. Choose the best answer, check your reasoning, and use the explanation to correct any gap.

Question 1

Question 1 of 4

Official statistics divide the adult noninstitutional population into three categories before any rate is computed. The labor force is measured as

The labor force is the employed plus people who are out of work and actively looking. Choice A leaves a residual that includes everyone not searching, C and D fold in adults who are not in the market at all, and E subtracts a group that was never counted in the total.
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B. the employed plus those actively seeking work

The labor force is the employed plus people who are out of work and actively looking. Choice A leaves a residual that includes everyone not searching, C and D fold in adults who are not in the market at all, and E subtracts a group that was never counted in the total.

Question 2

Question 2 of 4

An adult without a job has not looked for work in several months. Which of the following gives that person's official classification?

Active search during the reference period separates the unemployed from people outside the labor force, and no search happened here. Choice A counts past work as current employment, B drops the search requirement, D applies a type label that still presumes search, and E confuses the payroll survey with the household survey that produces this classification.
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C. Outside the labor force entirely

Active search during the reference period separates the unemployed from people outside the labor force, and no search happened here. Choice A counts past work as current employment, B drops the search requirement, D applies a type label that still presumes search, and E confuses the payroll survey with the household survey that produces this classification.

Question 3

Question 3 of 4

In Country X, 225 people are employed and 25 people are unemployed and actively searching. The unemployment rate is

The labor force is 225+25=250, so the rate is (25)/(250)=0.10. Choice A counts the unemployed a second time in the denominator and lands near 9 percent, C divides by the employed alone, D reports the count of unemployed people as if it were already a rate, and E reports the employed share.
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B. 10 percent

The labor force is 225+25=250, so the rate is (25)/(250)=0.10. Choice A counts the unemployed a second time in the denominator and lands near 9 percent, C divides by the employed alone, D reports the count of unemployed people as if it were already a rate, and E reports the employed share.

Question 4

Question 4 of 4

A worker has left one position and is searching for a better match. That unemployment is classified as

Ordinary movement between jobs while searching is what frictional unemployment names. Choice A needs a mismatch between skills and openings, B needs an economy-wide downturn, C needs a calendar pattern, and D forgets that an active searcher is still inside the labor force.
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E. frictional unemployment

Ordinary movement between jobs while searching is what frictional unemployment names. Choice A needs a mismatch between skills and openings, B needs an economy-wide downturn, C needs a calendar pattern, and D forgets that an active searcher is still inside the labor force.

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