Determining the labor-force participation rate

Question

Question 1: The labor force consists of

• Those employed plus those on temporary layoff.
• Those employed plus those unemployed.
• The working-age population minus those who are in the military or institutionalized.
• The working-age population plus those who are in the military or institutionalized.

Question 2: Suppose a country has a population of 61 million, of which 37 million are in the working-age population. Of those, 11 million are not in the labor force and 23 million are employed. The labor-force participation rate is

• 42.6 percent.
• 60.7 percent.
• 70.3 percent.
• 88.5 percent.

Question 3: If the population is 320 million, the working-age population is 215 million, the labor force is 145 million, and the number employed is 137 million, then the unemployment rate is

• 3.7 percent.
• 5.5 percent.
• 63.7 percent.
• 94.5 percent.

Question 4: In 2001, the number of unemployed people increased from 5.7 million to 8.3 million, while the labor force increased from 141.5 million to 142.3 million. By how much did the unemployment rate increase?

• 1.8 percentage points
• 2.6 percentage points
• 3.25 percentage points
• 5.8 percentage points

Question 5: In 2004, the number of people in the working-age population increased from 221.2 million to 223.4 million, while the labor force increased from 146.5 million to 147.4 million. By how much did the labor-force participation rate change?

• -0.2 percentage point
• 0.0 percentage point
• 0.2 percentage point
• 0.4 percentage point

Question 6: Labor productivity is calculated as

• output minus net exports.
• The average product of labor minus the marginal product of labor.
• Total factor productivity divided by the amount of capital.
• Output divided by hours worked.

Question 7: If output grew 3.9 percent last year and hours worked grew 1.3 percent, how much did labor productivity grow?

• 0.3 percent
• 2.6 percent
• 3.0 percent
• 5.2 percent

Question 8: The production function is

Y = A ´ Ka ´ L1- a.

If a = 0.3, and over the past year output grew 5 percent, capital grew 2 percent, and labor grew 3 percent, what was the growth rate of total factor productivity (TFP)?

• 0 percent
• 2.3 percent
• 2.5 percent
• 2.7 percent

Question 9: The production function is

Y = A ´ Ka ´ L1-a.

If a = 0.4, and over the past year output grew 4 percent, total factor productivity (TFP) grew 2.6 percent, and labor grew 1 percent, what was the growth rate of capital?

• 4 percent
• 3 percent
• 2 percent
• 1 percent

Question 10: In which period was total factor productivity growth the slowest?

• Long boom
• Economic liftoff period
• 1995-2005
• Reorganization period

Question 11: A period when output, income, and employment are rising is

• A recession.
• An expansion.
• A peak.
• A trough.

Question 12: A period when an expansion ends and a recession begins is

• A recession.
• an expansion.
• a peak.
• a trough.

Question 13: In the long boom up to 2007, there have been ____ recessions.

• 0
• 2
• 4
• 6
• 4 points

Question 14: The longest economic expansion in U.S. history occurred in the decade of the

• 1960s.
• 1970s.
• 1980s.
• 1990s.

Question 15: According to monetarists, the main source of the business cycle is

• Changes in the amount of money in the economy.
• Waves of optimism and pessimism that cause business investment in capital goods to fluctuate.
• Changes in the prices of oil and other resources.
• Changes in productivity.

Question 16: According to Keynesians, the main source of the business cycle is

• Changes in the amount of money in the economy.
• waves of optimism and pessimism that cause business investment in capital goods to fluctuate.
• changes in the prices of oil and other resources.
• changes in productivity.

Question 17: According to real business cycle (RBC) theory, the main source of the business cycle is

• changes in the amount of money in the economy.
• waves of optimism and pessimism that cause business investment in capital goods to fluctuate.
• changes in the prices of oil and other resources.
• changes in productivity.

Question 18: Compensation of workers per hour grew the fastest in the

• long boom.
• economic liftoff period.
• Great Depression.
• reorganization period.

Question 19: If you purchase a Dell computer manufactured in Round Rock, TX for $2,000

• Investment increases by $2,000.
• Consumption increases by $2,000
• Government spending increases by $2,000
• Net exports increases by $2,000

Question 20: If you purchase a Ford Mondeo manufactured in Germany for $20,000

• Consumption and net exports increases by $20,000
• Consumption and net exports decrease by $20,000
• Consumption increases $20,000, Net Exports decreases $20,000
• Consumption decreases $20,000, Net Exports increases $20,000

Question 21: Which is the most volatile component of GDP?

• Consumption
• Investment
• Government Spending
• Net Exports

Question 22: Which of the following is the best measure of living standards?

• Nominal GDP
• Real GDP
• Nominal GDP per capita
• Real GDP per capita

Question 23: A worker has been laid off from his job due to an economic downturn and is seeking new employment. This worker is

• Structurally unemployed
• Frictionally unemployed
• Cyclically unemployed
• Not in the labor force

Question 24: What action today is most likely to increase living standards in the future? All of these answers could be correct, but one of them has a direct effect while the rest propogate through other effects.

• Higher levels of consumption
• Higher levels of government spending
• Higher levels of investment
• Lower levels of taxes

Question 25: The country of Examplestan has 100,000,000 citizens. 50,000,000 are adults who are employed or are actively seeking work.

2 million have been laid off due to recession

1 million have quit their jobs to look for work in cities with better climates

1.5 million Have skills that do not match any jobs in their region.

What is the natural rate of unemployment in Examplestan?

• 1.0%
• 2.5%
• 4.5%
• 5.0%
• 9.0%