Question

1. There are 63 unemployed people, 1137 employed people, and the adult population is 1582. What is the labor force participation rate?

2. If the average wage paid to the worker was $20 in the year 1990 and $30 in the year 2000, then the average worker in the year 2000 must have been better off in terms of purchasing power. T/F

3. According to the Bureau of Labor Statistics, you are considered to be unemployed if you have no job. T/F

4.. Each month you spend $500 buying coffee. If the price of coffee increases from $2 to $3, what happens to your purchasing power?

A.) Unchanged

B.) Increases

C.) Decreases

Answer 1

1. LFPR = (Labor force/ adult population)*100 = ((63+1137)/1582)*100 = 75.85 percent

2. True. According to BLS , the increase in average prices is 31.75%, and the increase in wages is 100% ((30-20)/10)*100, which is above the average cost of prices and hence the worker is better off

3. False. A person is considered unemployed who do not have job and are actively looking for job in the past four weeks and are currently available for work

4. Option C. As more dollar has to be spend for the same quantity and hence the purchasing power decreases