4.2.1 Measurement of Unemployment

• What does the labor force refer to?

  Employed or unemployed people
• Unemployed individuals are actively seeking employment.


  True
• Unemployed persons are individuals who are not currently employed but are actively seeking work
• Retirees who are not seeking employment are considered part of the labor force.

  False
• What distinguishes employed individuals from the labor force?

  Working for pay
• A person working one hour per week for monetary compensation is considered employed.

  True
• The unemployment rate is calculated using the formula: (Unemployed / Labor Force) x 100
• The labor force includes all adults in a country, regardless of their employment status.

  False
• To be considered employed, a person must be working at least one hour per week for monetary compensation
• What is the definition of "unemployed"?

  Not working but seeking employment
• What is the minimum number of hours a person must work per week to be considered employed?

  One hour
• Part-time employment involves working less than 35 hours per week.
• The unemployment rate is calculated as (Unemployed / Labor Force) × 100.


  True
• Match the data source with its description:

  Labor Force Surveys (LFS) ↔️ Direct surveys of households

  Administrative Records ↔️ Data collected by government agencies
• What does the unemployment rate reflect about the economy?

  Overall health and performance
• Order the four main types of unemployment:

  1️⃣ Frictional

  2️⃣ Structural

  3️⃣ Cyclical

  4️⃣ Seasonal
• Structural unemployment arises from a mismatch between job skills and demand.
• What is an example of seasonal unemployment?

  Summer employment for lifeguards
• Underemployment occurs when individuals are employed part-time but desire full-time work.

  True
• The labor force refers to the total number of people who are either employed or unemployed
• What is the labor force calculated as?

  Employed plus unemployed
• Within what timeframe must an unemployed person have been actively looking for a job to be considered unemployed?

  Past 4 weeks
• The labor force represents the total number of people available for work in an economy
• Criteria for classifying someone as unemployed

  1️⃣ Not currently employed

  2️⃣ Actively looking for a job within the past 4 weeks

  3️⃣ Available to start a job if offered one
• What defines full-time employment in terms of hours worked per week?

  35 or more hours
• What does the unemployment rate measure?

  Percentage of unemployed in labor force
• Why is understanding the labor force important?

  Assess economy's productive capacity
• Full-time employment requires working less than 35 hours per week.

  False
• Individuals who are not working and not actively seeking employment are considered not in the labor force.
• Full-time employment requires working 35 or more hours per week.

  True
• What does the unemployment rate measure?

  Percentage of unemployed in labor force
• A low unemployment rate may indicate economic growth and job opportunities.
• Labor Force Surveys (LFS) collect data on employment status, occupation, and demographic information.
• Match the factor with its impact on the unemployment rate:

  Economic Growth ↔️ Decreases unemployment rate

  Recessions ↔️ Increases unemployment rate
• What is the cause of frictional unemployment?

  Individuals moving between jobs
• Cyclical unemployment is caused by economic recessions.

  True
• What is one limitation of the unemployment rate?

  Excludes discouraged workers