Notes

n
Status
Alex is a 40-year-old steelworker who was laid off from his job 6 months ago. He is frustrated with his inability to find a new full-time position. Last week, he took a part-time job but was given only 3 hours of work. Employed Correct
Becky is a 24-year-old recent college graduate. She did not work for pay last week, but she had two job interviews. Unemployed Correct
Clancy is a 48-year-old accountant who has been out of work for almost a year. He became so discouraged that he gave up on his job search a couple of months ago. Not in the labor force Correct
Kate is a 29-year-old who lost her job as an associate producer for a podcast. After spending a few weeks out of work and interviewing for several other positions, she gave up on her job search and decided to go back to grad school. She made that decision a few months ago. Not in the labor force Correct
Hubert is a famous novelist. He is spending the summer at his lake house Wisconsin, doing a little writing each day but mostly spending his time gardening and reading. Employed Correct
Eileen is a 10-year-old student at River Mountain Middle School. She babysits her younger brother and does other chores, so her parents give her an allowance of $25 per week. Not in the adult population Correct
Points:
0.5 / 1
The BLS considers a person to be unemployed if he or she is in the adult population, did not work for pay in the previous week, and has actively looked for work during the preceding 4 weeks. By this definition, the BLS classifies Becky as unemployed.
Anyone in the adult population who worked for pay in the last week, even if unsatisfied with his or her job, is considered employed. By this definition, the BLS classifies Alex and Hubert as employed.
Because Clancy and Kate are not actively seeking employment, they are not considered part of the labor force. Note that not being in the labor force is different from being unemployed. Once people leave the labor force, they are not counted when calculating the unemployment rate.
Because Eileen is under the age of 16, she is not considered part of the adult population.
Complete the right half of the following equation to reflect the labor force participation rate reported by the BLS.
Labor Force Participation Rate
=
100×Number in Labor ForceAdult Population
Correct
Points:
1 / 1
According to this formula, what is the labor force participation rate of this economy of six people?

Incorrect 33.33%
40%
50%
Correct 60%
Points:
1 / 1
The BLS defines the labor force participation rate as the fraction of the adult population that is in the labor force—that is, those who are employed or else unemployed and actively searching for work.
By this definition, Alex, Becky, and Hubert are part of the labor force because they are either working or searching for a job. In contrast, because Clancy and Kate are not actively seeking employment, they are not considered part of the labor force. And because Eileen is under the age of 16, she is not considered part of the adult population, and is therefore not part of the labor force.
Because the adult population in this small economy is five people, and because three of them are in the labor force, the labor force participation rate is 35=60%
.
Labor Force Participation Rate
=
100×35
=
60%
Complete the right half of the following equation to reflect the unemployment rate reported by the BLS.
Unemployment Rate
=
100×Number of Unemployed WorkersLabor Force
Correct
Points:
1 / 1
According to this formula, what is the unemployment rate of this economy of six people?

Correct 33.33%
40%
50%
Incorrect 60%
Points:
0 / 1
The BLS defines the unemployment rate as the fraction of the labor force that is unemployed.
Alex, Becky, and Hubert are part of the labor force because they are either working or searching for a job.
The BLS considers a person to be unemployed if he or she is in the adult population, did not work for pay in the previous week, and has been actively seeking work during the preceding 4 weeks. By this definition, the BLS classifies Becky as unemployed.
Since the size of the labor force in this small economy is three people, and since one of them is unemployed, the unemployment rate is computed as follows.
Unemployment Rate
=
100×13
=
33.33%