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Economics Today, 18e (Miller)
Chapter 7 The Macroeconomy: Unemployment, Inflation, and Deflation

7.1 Unemployment

1) Which of the following is TRUE of unemployment?
A) It is defined as the number of people actively looking for work who do not have jobs.
B) The result is that the economy operates inside its production possibilities curve.
C) There are psychological consequences associated with unemployment.
D) All of the above.
Answer: D
Diff: 2
Topic: 7.1 Unemployment
Learning Outcome: Macro-14: Identify different types and measures of unemployment and
discuss its causes
AACSB: Analytical thinking

2) Which of the following is TRUE about the labor force?
A) It includes those over 16 ages old and are employed.
B) It includes those over 16 ages old and are unemployed.
C) Both A and B are correct.
D) None of the above is correct.
Answer: C
Diff: 2
Topic: 7.1 Unemployment
Learning Outcome: Macro-14: Identify different types and measures of unemployment and
discuss its causes
AACSB: Analytical thinking

3) A country's labor force is equal to
A) the population between the ages of 16 and 65.
B) the number of employed people.
C) the total number of employed and unemployed people.
D) the total number of employed people, unemployed people, and discouraged workers.
Answer: C
Diff: 2
Topic: 7.1 Unemployment
Learning Outcome: Macro-14: Identify different types and measures of unemployment and
discuss its causes
AACSB: Analytical thinking




1
Copyright © 2016 Pearson Education, Inc.

,4) Which of the following people would be considered unemployed?
A) Homer, who lost his job at the power plant and is not looking for work
B) Lenny, who is working part time at a fast food restaurant
C) Abe, who is retired
D) Edna, who lost her job as a teacher and is currently searching for a new job
Answer: D
Diff: 2
Topic: 7.1 Unemployment
Learning Outcome: Macro-14: Identify different types and measures of unemployment and
discuss its causes
AACSB: Analytical thinking

5) The term "unemployment" is best described as the total number of
A) people not working.
B) people who have been laid off and have stopped looking for work.
C) adults who work fewer hours than they wish to work.
D) adults who are looking for work but have not found a job.
Answer: D
Diff: 1
Topic: 7.1 Unemployment
Learning Outcome: Macro-14: Identify different types and measures of unemployment and
discuss its causes
AACSB: Analytical thinking

6) According to the text, during which time period did the United States have the highest
unemployment rates?
A) 1930s
B) 1950s
C) 1980s
D) 2000s
Answer: A
Diff: 2
Topic: 7.1 Unemployment
Learning Outcome: Macro-14: Identify different types and measures of unemployment and
discuss its causes
AACSB: Analytical thinking




2
Copyright © 2016 Pearson Education, Inc.

,7) Individuals who have stopped looking for work because they are convinced that they will not
find a job are considered
A) structurally unemployed.
B) discouraged workers.
C) part of the labor force.
D) underemployed.
Answer: B
Diff: 2
Topic: 7.1 Unemployment
Learning Outcome: Macro-14: Identify different types and measures of unemployment and
discuss its causes
AACSB: Analytical thinking

8) Which federal agency publishes the United States' unemployment figures?
A) Health and Human Services
B) The Bureau of Labor Statistics
C) the Federal Reserve
D) the Senate Committee on Labor Relations
Answer: B
Diff: 1
Topic: 7.1 Unemployment
Learning Outcome: Macro-14: Identify different types and measures of unemployment and
discuss its causes
AACSB: Analytical thinking

9) In the history of the United States, unemployment reached its highest rate
A) in the Panic of 1893.
B) in the 1930s.
C) in the period between World War II and the Korean War.
D) in the Great Recession of the late 2000s.
Answer: B
Diff: 1
Topic: 7.1 Unemployment
Learning Outcome: Macro-14: Identify different types and measures of unemployment and
discuss its causes
AACSB: Analytical thinking




3
Copyright © 2016 Pearson Education, Inc.

, 10) When did the United States register its lowest unemployment rate?
A) in the 1920s
B) in the economic boom of the 1990s
C) in the Roaring Nineties (1890s)
D) at the end of World War II
Answer: D
Diff: 1
Topic: 7.1 Unemployment
Learning Outcome: Macro-14: Identify different types and measures of unemployment and
discuss its causes
AACSB: Analytical thinking

11) The population of individuals at least 16 years of age can be broken into 3 groups. They are
A) the unemployed, discouraged workers, and retirees.
B) those employed full-time, those employed only part-time, and the unemployed.
C) those working in the for-profit sector, those working in the nonprofit sector, and individuals
who are unemployed.
D) none of the above.
Answer: D
Diff: 1
Topic: 7.1 Unemployment
Learning Outcome: Macro-14: Identify different types and measures of unemployment and
discuss its causes
AACSB: Analytical thinking

12) The rate of unemployment is calculated as the number of
A) unemployed workers divided by the number of employed workers.
B) people in the civilian labor force divided by the number of unemployed.
C) unemployed divided by the number of people in the civilian labor force.
D) employed workers divided by the number of unemployed workers.
Answer: C
Diff: 1
Topic: 7.1 Unemployment
Learning Outcome: Macro-14: Identify different types and measures of unemployment and
discuss its causes
AACSB: Analytical thinking




4
Copyright © 2016 Pearson Education, Inc.