1.

(02.03 MC) Which of the following would directly decrease the labor force participation rate? (5 points)

	More parents decide to balance part-time work and raising children.
	Many workers lose their jobs and start searching for new ones.
	People begin to increasingly put off retirement.
	An increasing number of people choose to retire early.
	Many people come out of full retirement to pursue part-time work.

2.

(02.03 MC) Which of the following statements reflects a valid criticism of the unemployment rate as it is measured by the U.S. Bureau of Labor Statistics? (5 points)

	A drop in the unemployment rate can be misleading if many people have left the labor force.
	Discouraged workers are included in the official unemployment rate but should not be.
	Counting people younger than 16 as unemployed artificially inflates the unemployment rate.
	Frictional unemployment is excluded from the unemployment rate but should not be.
	Counting full-time students as unemployed makes the unemployment rate misleadingly high.

3.

(02.03 MC) If the unemployment rate is 12 percent, which of the following must be true? (5 points)

	For every 100 people in the country, 12 are seeking work.
	Twelve percent of the total population are discouraged workers.
	Twelve percent of the population have stopped pursuing employment.
	Twelve percent of the labor force is unemployed.
	The labor force participation rate is 88 percent.

4.

(02.03 HC) If an economy has a structural unemployment rate of 1 percent, a frictional unemployment rate of 4 percent, and an actual rate of unemployment of 12 percent, what must be its cyclical unemployment rate? (5 points)

	5 percent
	7 percent
	8 percent
	11 percent
	17 percent

5.

(02.03 MC)

Total Population 16 and Older	100 million
Workers Employed	64.4 million
Structurally Unemployed	1.6 million
Cyclically Unemployed	1 million
Frictionally Unemployed	3 million

Based on the employment data above, this country's unemployment rate is ____ and its labor force participation rate is _________. (5 points)

	5.6%; 64.4%
	8%; 70%
	8.7%; 70%
	35.6%; 64.4%
	64.4%; 35.6%