Name: 
 

Unit 5 PRACTICE - Full Employment



Multiple Choice
Identify the choice that best completes the statement or answers the question.
 

 1. 

Which of the following people is counted in the labor force?
a.
Chou, who lost his job and last looked for work three months ago
b.
Stephanie, who holds a Ph.D. in history, but can only find part-time employment at a fast-
food restaurant
c.
Jordan, who would like to work as a stockbroker but is now a househusband
d.
Steffan, who thinks he could easily earn $100 thousand per year, despite the opinion of the
psychiatrist at the state hospital where he is a patient
e.
Monique, age 90, who is enjoying her retirement in Montana
 

 2. 

Consider an economy made up of 100 people, 60 of whom hold jobs, 10 of whom are looking for
work, and 15 of whom are retired. The number counted as unemployed is
a.
10
b.
15
c.
40
d.
30
e.
90
 

 3. 

Consider an economy made up of 150 people, 90 of whom hold jobs, 10 of whom are looking for
work, 15 of whom are retired, and 20 are discouraged former workers. The unemployment rate is:
a.
10%
b.
15%
c.
66%
d.
90%
e.
impossible to calculate from this limited data
 

 4. 

The unemployment rate will increase whenever there is a(n)
a.
increase in the number of persons classified as unemployed
b.
increase in the number of unemployed when compared to the number in the labor force
c.
increase in the size of the U.S. population and there is no change in the number of persons
classified as employed
d.
reduction in the size of the labor force
e.
reduction in the size of the labor force while the number of unemployed decreases
 

 5. 

The unemployment rate disguises the extent of the unemployment problem because
a.
children are not counted as unemployed
b.
retired persons are not counted as unemployed
c.
full-time students are not counted as unemployed
d.
discouraged workers are counted as unemployed
e.
people overqualified for their current job are not considered unemployed
 

 6. 

The labor force consists of all
a.
the people in the economy who are not retired
b.
people in the economy over 16 years of age
c.
the adults in the economy between 18 and 65 years old who are able to work
d.
the noninstitutionalized population over 16 in the economy who hold jobs or are looking
for them
e.
the citizens in the economy who are graduates of high school
 

 7. 

Which of the following are classified as "discouraged workers"?
a.
all those between 16 and 65 who are neither disabled nor in an institution and are also
neither employed nor seeking employment
b.
labor force members who have chosen early retirement because they dislike their work or
think the pay is too low
c.
members of the noninstitutional population who say they want to be employed but are not
searching for a job
d.
members of the labor force who are looking for a job but cannot find one
e.
anyone in the population who is not working
 

 8. 

A person who repairs typewriters becomes unemployed because people buy personal computers
instead of having their typewriters repaired. This person can best be described as
a.
frictionally unemployed
b.
structurally unemployed
c.
cyclically unemployed
d.
not part of the labor force
e.
a discouraged worker
 

 9. 

When the economy is at full employment, what types of unemployment may exist?
a.
none - there is no unemployment at full employment.
b.
only cyclical
c.
only frictional
d.
both cyclical and frictional, but not structural
 

 10. 

Exclusion of which of the following tends to understate the true extent of unemployment in the
economy?
a.
children
b.
retired persons
c.
students
d.
people who do not want to work
e.
discouraged workers
 



 
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