The ups and downs of unemployment.

• Position: Exercises on unemployment

[GRAPHIC OMITTED]

The unemployment rate is a key indicator of a nation's economic well-being [see "'Econ Speak,"p. 8], which is why economists, politicians, and news anchors watch it so closely. During a recession, most businesses scale back on hiring, and many are forced to cut costs by reducing their existing workforce. To calculate the unemployment rate, the U.S. government surveys a random sample of the civilian labor force--Americans age 16 and over who are not in the armed forces or in prison, and who are either working or would like to be working.

BEFORE 1948, THE UNEMPLOYMENT RATE WAS CALCULATED FOR AMERICANS AGE 14 AND OVER.

ANALYZE THE GRAPH

(1) At the height of the Great Depression in 1933, experts estimate that nearly 25 percent of American workers were unemployed. By 1940, the jobless rate had decreased by about--percentage points.

a 15

b 13

c 10

d 7

(2) America's entry into World War II in 1941 was followed by a steady--in the unemployment rate.

a 10-year rise

b 6-year rise

c 6-year drop

d 3-year drop

(3) Since 1940, the longest stretch that the unemployment rate has stayed above 6 percent is about--consecutive years.

a 11

b 8

c 5

d 4

(4) In 2010, about 14.8 million Americans were unemployed. What was the approximate size of the civilian labor force for that year?

a 96 million

b 122 million

c 150 million

d 223 million

(5) You can infer from the graph that an economic recession most likely occurred in the--.

a early '80s

b mid '80s

c mid '60s

d late '60s

DISCUSSION QUESTIONS

(1) Why do you think that America's involvement in World War II had such a positive effect on the...