1) The working-age population is defined as the number of

A) People over the age of 16 who are not in jail, hospital, or other institution.
B) People who have a job.
C) People working full-time jobs who are over the age of 16.
D) People looking for work.
Answer: A

2) Suppose there are 100 million in the labor force, and 6 million unemployed
people. During the next month, 200,000 people lose their jobs and 300,000 find
jobs. The new total of employed persons is ________ and the new
unemployment rate is ________.
A) 100.1 million; 5.8 percent
B) 100 million; 6.1 percent
C) 94.1 million; 5.9 percent
D) 93.9 million; 6.1 percent
Answer: C

3) Structural unemployment is
A) Associated with the changing of jobs in a dynamic economy.
B) Associated with general downturns in the economy.
C) Associated with changes in technology that change required job skills.
D) Very short-term unemployment.
Answer: C

4) Frictional unemployment
A) Includes discouraged workers.
B) Is voluntary part-time unemployment.
C) Is unemployment associated normal labor turnover.
D) Is unemployment associated with declining industries.
Answer: C

1) Why is unemployment a problem?

2) Explain the difference between frictional and structural unemployment.

3) Consider the following statement: ʺReal GDP and potential GDP are always
equal.ʺ Is this statement true or false? Explain your answer.