Quiz 21: Production and Growth


a.The statement is false , because the person who is officially unemployed might be looking for a job. b.The statement is true , because people in the labor force may not get work due to structural, seasonal, cyclical, or frictional unemployment. c.The statement is false , because adults who are not working may not be looking for jobs or they may prefer to remain unemployed. d.The statement is true , because people may not choose to work or they may be unemployed due to their incompetence of technical skill.

Overall unemployment rate is not an appropriate measure Overall unemployment rate of a country does not represent the unemployment rate of any specific subpopulation groups. Rather it describes only the number of unemployed persons in a labor force of an economy. In a country, unemployment rate may vary with different subpopulation groups, such as: • Age (teenage and adult), • Gender (males and females), • Race (blacks and whites), • Skilled and unskilled, and • Geographical locations (rural and urban). Example: In the United States, unemployment rate is high among the blacks than the whites. The number of teenage unemployed workers is higher than other age groups. Similarly, the unemployment rate tends to be high in case of female workers. In urban areas, unemployment rate is low because employment opportunities are more compared to the rural areas. Unskilled workers can be seasonally unemployed and more vulnerable to economic fluctuations than the skilled workers.

When studying the unemployment rate is important to note the difference between those who are unemployed and those who are not a member of the work force. For example, an old retiree is not unemployed because he or she is not actively searching for a job; he or she is not a member of the work force. However, a jobless individual who has actively sought work in the past four weeks would be considered would be considered unemployed and would contribute to the unemployment rate.When the economy creates jobs, in this case 300,000, the resulting change in the unemployment rate will depend on the response of the nation's citizens. For example, 500,000 people who were previously not searching for work due to discouraged outlook may begin searching for jobs. 300,000 of them will receive employment, while 200,000 will need to continue their search. In this sense, the unemployment rate has risen. However, in this situation with the labor force increasing by only 200,000, it seems likely that all 200,000 should receive jobs and the unemployment rate will thus decrease.

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