Question

2. In calculating the unemployment rate, part-time workers are

A. counted as unemployed because they are not working full-time.

B. counted as employed because they are receiving payment for work.

C. used to determine the size of the labor force, but not the unemployment rate.

D. treated the same as "discouraged" workers who are not actively seeking employment.

3. Bethany heard that there had been inflation last month. She laughed and did not believe it. When asked why not, she said that last week she spent less at the grocery store because the cost of food had come down. Which of the following is the correct response?

A. Bethany is right, if food prices are lower, so are all other prices.

B. Bethany is wrong, food prices may have fallen, but other prices have risen so the average price of goods is higher.

C. Bethany is right, all prices must be rising for there to be inflation.

D. Bethany is wrong, food prices are not used to calculate the rate of inflation.

Answer 1

Ques2: Option B is correct. If a person is working part-time, or a full time he will consider it as employed. Hence, for the calculation of the unemployment rate, we must count them as employed.

Ques3: Option C is correct as all prices must be rising for there to be inflation. She is laughing because spent less as the price goes down. Hence, there is a deflation in such case not inflation.