Question

unemployment: concepts, measurement, and costs
even in a healthy, growing economy, some unemployment always exists. frictional, structural, and seasonal unemployment are normal. when nearly everyone who wants to work has a job, the economy is said to have full employment. the small share still unemployed for normal reasons is called the natural rate of unemployment, usually between 4% and 6%.
problems with the unemployment rate
the unemployment rate, measured by the bureau of labor statistics (bls), isn’t perfect:

• discouraged workers — people who stop looking for work — are not counted, so the rate may look lower than it really is.
• involuntary part - time workers are counted as “employed,” even if they want full - time jobs, which hides underemployment.
• underground or informal workers may report being unemployed even though they earn income off the books, which can make the rate seem higher than it is.

economic costs of high unemployment
when unemployment rises, real gdp falls because fewer workers produce goods and services. unemployed people lose income, homes, and benefits, while the government collects less in taxes and must spend more on aid programs. high unemployment hurts individuals, families, and the economy as a whole.
question #12
which of the following best describes the overall impact of high unemployment?
a. it hurts individuals and families but not the economy
b. it mainly benefits businesses through lower wages
c. it harms individuals, families, and the economy as a whole
d. it has no long - term effects
question #13
why does the official unemployment rate not accurately reflect the number of people who are truly unemployed?
a. the official unemployment rate only counts people who are actively looking for work, not those who have given up.
b. the official unemployment rate does not count people who are working part - time but would prefer full - time work.
c. the official unemployment rate does not count people who are working in the informal or underground economy.
d. all of the above.
question #14
what is the relationship between the unemployment rate and the overall health of the economy?
a. a high unemployment rate indicates a healthy economy.
b. a low unemployment rate indicates a healthy economy.
c. there is no relationship between the unemployment rate and the overall health of the economy.
d. the unemployment rate is not a reliable indicator of the overall health of the economy.

Explanation:

Question #12

The text states that high unemployment "hurts individuals, families, and the economy as a whole".

The text mentions three issues with the unemployment rate: discouraged workers (not counted), involuntary part - time workers (counted as employed), and underground workers (may misreport).

The text implies that when the economy is healthy (full employment), the unemployment rate is low (natural rate of 4 - 6%).

Answer:

C. It harms individuals, families, and the economy as a whole

Question #13