ECON 705 LSUS EXAM 3 2026 EXAM
PREPARATION PACK KEY MACROECONOMICS
AND MICROECONOMICS MODELS WITH
SAMPLE QUESTIONS
◉ unemployed. Answer: doesn't work but has searched for work
within the past 4 weeks
◉ not in labor force. Answer: have no job and not searching for a job
◉ labor force. Answer: all potential workers, working and not
working
◉ unemployment rate. Answer: unemployed/labor force x 100 (U)
◉ Labor force participation rate. Answer: % of the adult population
in the labor force
◉ natural rate of unemployment. Answer: nominal rate of
unemployment around which the actual unemployment rate
fluctuates; made up of frictional and structural U
, ◉ frictional unemployment. Answer: unemployment that occurs
when people take time to find a job; short-term for most workers
◉ Unemployment Insurance (UI). Answer: a government program
that partially protects workers' incomes when they become
unemployed
◉ Cost of UI. Answer: increase in frictional unemployment
◉ structural unemployment. Answer: unemployment that occurs
when workers' skills do not match the jobs that are available
◉ unions. Answer: A worker association that bargains with
employers over wages, benefits, and working conditions
◉ collective bargaining. Answer: negotiations between unions and
employers over wages, benefits, and working conditions
◉ efficiency wage theory. Answer: firms voluntarily pay above
equilibrium wages to boost worker productivity
◉ marginally attached workers. Answer: someone that is neither
working nor looking for work but have looked for work in the past
12 months
PREPARATION PACK KEY MACROECONOMICS
AND MICROECONOMICS MODELS WITH
SAMPLE QUESTIONS
◉ unemployed. Answer: doesn't work but has searched for work
within the past 4 weeks
◉ not in labor force. Answer: have no job and not searching for a job
◉ labor force. Answer: all potential workers, working and not
working
◉ unemployment rate. Answer: unemployed/labor force x 100 (U)
◉ Labor force participation rate. Answer: % of the adult population
in the labor force
◉ natural rate of unemployment. Answer: nominal rate of
unemployment around which the actual unemployment rate
fluctuates; made up of frictional and structural U
, ◉ frictional unemployment. Answer: unemployment that occurs
when people take time to find a job; short-term for most workers
◉ Unemployment Insurance (UI). Answer: a government program
that partially protects workers' incomes when they become
unemployed
◉ Cost of UI. Answer: increase in frictional unemployment
◉ structural unemployment. Answer: unemployment that occurs
when workers' skills do not match the jobs that are available
◉ unions. Answer: A worker association that bargains with
employers over wages, benefits, and working conditions
◉ collective bargaining. Answer: negotiations between unions and
employers over wages, benefits, and working conditions
◉ efficiency wage theory. Answer: firms voluntarily pay above
equilibrium wages to boost worker productivity
◉ marginally attached workers. Answer: someone that is neither
working nor looking for work but have looked for work in the past
12 months
