PSU ECO 152 LESSON 4-REVIEW

The unemployment rate is

• unemployed/population × 100.

• (employed - unemployed)/labor force × 100.

• (labor force - employed)/labor force × 100.

• (employed - labor force)/employed × 100

The total population (aged 16 and older) of Pageland is 48 million. Of this total, 4 million are unemployed and 36 million currently hold jobs. What are the rates of unemployment and labor force participation of Pageland?

• The rate of unemployment is 11 percent, and the labor force participation rate is 90 percent.

• The rate of unemployment is 10 percent, and the labor force participation rate is 83 percent.

• The rate of unemployment is 10 percent, and the labor force participation rate is 75 percent.

• The rate of unemployment is 11 percent, and the labor force participation rate is 83 percent.

An individual who cannot find a job because his or her job skills have become obsolete is an example of

• frictional unemployment.

• structural unemployment.

• cyclical unemployment.

• seasonal unemployment.

4)If the natural rate of unemployment is 5.5% and the actual unemployment rate is 7.5%, then, according to Okun's law the GDP gap is:

• 4%

• 3%

• 13%

• 2%

A man is fired from his job because he was late for work too many times. While he is searching for another job he would be classified as

• frictionally unemployed

• cyclically unemployed.

• structurally unemployed.

• not in the labor force because his employer had a legitimate reason for firing him.

cylical unemployment is the

• unemployment that results when people become discouraged about their chances of finding a job so they stop looking for work.

• portion of unemployment that is due to the normal working of the labor market.

• unemployment that occurs during recessions and depressions.

• portion of unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certain industries.

The sum of frictional and structural unemployment is thought of as the

• seasonal rate of unemployment

• natural rate of unemployment

• normal rate of unemployment.

• cylical unemployment

Inflation is an increase in

• the price of one item.

• the overall price level.

• the average income level.

• real gross national product

If the Consumer Price Index rises from 300 to 333 in a year, the rate of inflation in that year is:

• 11%

• 33%

• 91%

• 10%

In 2007, Maxine's nominal income increased by 1% while the price level rose by 3%. Consequently, Maxine's real income:

• rose by 4%

• fell by 1%

• rose by 2%

• fell by 2%