Check GMAT Club Decision Tracker for the Latest School Decision Releases https://gmatclub.com/AppTrack
GMAT Club

 It is currently 24 Mar 2017, 07:11

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# The full-time unemployment rate cannot be determined with

Author Message
TAGS:

### Hide Tags

Senior Manager
Joined: 07 Jan 2008
Posts: 407
Followers: 3

Kudos [?]: 231 [0], given: 0

The full-time unemployment rate cannot be determined with [#permalink]

### Show Tags

24 Jun 2008, 02:56
The full-time unemployment rate cannot be determined with great precision. One thing is certain: it cannot be zero or even close to zero. A zero unemployment rate would mean that no one ever entered or re-entered the labor force, that no one ever quit a job or was laid off, and that for new entrants or re-entrants, the process of searching for a job consumed no time. Moreover, full-time employment cannot be defined as an equality between the number of unemployed persons and the number of unfilled jobs. By this definition, almost any unemployment rate could be consistent with the full-time employment rate.
The customary definition of the full-time U.S. unemployment rate is the lowest rate of unemployment that can be attained without resulting in an accelerated rate of inflation, given the existing economic conditions. However, no one can be sure exactly what the unemployment rate is, based on this definition, since it is not possible to predict exactly how great a change in the rate of inflation will be associated with any given change in the unemployment rate. In the early 1960s, President Kennedy's Council of Economic Advisors (CEA) determined that 4 percent was the best estimate of the full-time U.S. unemployment rate. That rate was based on data collected during the period from mid-1955 to mid-1957, when the U.S. unemployment rate fluctuated around an average of 4.1 percent and the consumer price index advanced at an average rate of 2.5 percent per year. Although a 4-percent U.S. unemployment rate may have been consistent with an acceptably low rate of inflation in the mid-1950s, by the 1960s this proposition had become increasingly doubtful. Our experience since then has been such that those who accept the customary definition of the full-time U.S. unemployment rate now consider 4.5 percent to be the optimal rate under the existing circumstances.
The principal reason for this upward adjustment in the full-time U.S. unemployment rate is the changed composition of the labor force. As the labor force becomes increasingly composed of elderly people and women, the number of workers has increased. Similarly, the number of workers who are now eligible to collect benefits has increased. To the extent that these changes have increased voluntary and involuntary layoff rates and the average length of time unemployed persons spend looking for work, the full-time unemployment rate has risen.

Q1:

According to the passage, all of the following factors must be considered in estimating the full-time unemployment rate EXCEPT

A) the percentage of women in the work force

B) the ratio of the number of unemployed workers to the number of vacant positions

C) the strength of inflationary tendencies in the economic system

D) the number of young people in the job market

E) the availability of financial help for those who are out of work

Question # 2
The passage implies that the extension of unemployment insurance to new groups of workers and the lengthening of the period for benefit payments may have encouraged:
I. Layoffs of workers by employers.
II. Abandonment of unsatisfactory jobs by employees.
III. Longer periods of job hunting by unemployed workers.

A) I only

B) I and II only

C) I and III only

D) II and III only

E) I, II, and III

Question # 3
The primary purpose of the passage is to

A) define a term

B) correct a misconception

C) suggest a new theory

D) pose a dilemma

E) make a prediction

Question # 4
The passage provides information to answer which of the following questions?

A) Why is a zero unemployment rate unlikely ever to be attained?

B) What is the likely future trend of the full-employment unemployment rate?

C) Why has the percentage of younger workers in the job market increased?

D) What rate of inflation is generally considered to be the highest acceptable rate?

E) To what extent do workers tend to quit their jobs as a result of increased unemployment benefits?
If you have any questions
New!
SVP
Joined: 17 Jun 2008
Posts: 1568
Followers: 11

Kudos [?]: 259 [0], given: 0

Re: RC: full-time unemployment rate [#permalink]

### Show Tags

24 Jun 2008, 04:56
1 - E
2 - D
3 - A
4 - D
Senior Manager
Joined: 10 Mar 2008
Posts: 368
Followers: 5

Kudos [?]: 275 [0], given: 0

Re: RC: full-time unemployment rate [#permalink]

### Show Tags

24 Jun 2008, 11:18
Source of this question?
Manager
Joined: 04 Jun 2008
Posts: 159
Followers: 3

Kudos [?]: 78 [0], given: 0

Re: RC: full-time unemployment rate [#permalink]

### Show Tags

24 Jun 2008, 12:53
E C A D
Current Student
Joined: 28 Dec 2004
Posts: 3382
Location: New York City
Schools: Wharton'11 HBS'12
Followers: 15

Kudos [?]: 289 [0], given: 2

Re: RC: full-time unemployment rate [#permalink]

### Show Tags

24 Jun 2008, 13:06
i will go with B E A A

B
Moreover, full-time employment cannot be defined as an equality between the number of unemployed persons and the number of unfilled jobs.

E
To the extent that these changes have increased voluntary and involuntary layoff rates and the average length of time unemployed persons spend looking for work, the full-time unemployment rate has risen.

A--i guess everyone got this one right..

A
A zero unemployment rate would mean that no one ever entered or re-entered the labor force, that no one ever quit a job or was laid off, and that for new entrants or re-entrants, the process of searching for a job consumed no time

Lexis please post OA..i dont think many partcipants here will actually attempt RC questions..
Current Student
Joined: 28 Dec 2004
Posts: 3382
Location: New York City
Schools: Wharton'11 HBS'12
Followers: 15

Kudos [?]: 289 [0], given: 2

Re: RC: full-time unemployment rate [#permalink]

### Show Tags

26 Jun 2008, 12:12
can u post the OA
Intern
Joined: 17 Jun 2008
Posts: 26
Location: Chennai
Followers: 0

Kudos [?]: 3 [0], given: 1

Re: RC: full-time unemployment rate [#permalink]

### Show Tags

26 Jun 2008, 23:16
Hi,

Have you appeared for GMAT....
_________________

If opportunity doesn't knock build a door

VP
Joined: 03 Apr 2007
Posts: 1367
Followers: 4

Kudos [?]: 637 [0], given: 10

Re: RC: full-time unemployment rate [#permalink]

### Show Tags

29 Jun 2008, 17:07
lexis wrote:
The full-time unemployment rate cannot be determined with great precision. One thing is certain: it cannot be zero or even close to zero. A zero unemployment rate would mean that no one ever entered or re-entered the labor force, that no one ever quit a job or was laid off, and that for new entrants or re-entrants, the process of searching for a job consumed no time. Moreover, full-time employment cannot be defined as an equality between the number of unemployed persons and the number of unfilled jobs. By this definition, almost any unemployment rate could be consistent with the full-time employment rate.
The customary definition of the full-time U.S. unemployment rate is the lowest rate of unemployment that can be attained without resulting in an accelerated rate of inflation, given the existing economic conditions. However, no one can be sure exactly what the unemployment rate is, based on this definition, since it is not possible to predict exactly how great a change in the rate of inflation will be associated with any given change in the unemployment rate. In the early 1960s, President Kennedy's Council of Economic Advisors (CEA) determined that 4 percent was the best estimate of the full-time U.S. unemployment rate. That rate was based on data collected during the period from mid-1955 to mid-1957, when the U.S. unemployment rate fluctuated around an average of 4.1 percent and the consumer price index advanced at an average rate of 2.5 percent per year. Although a 4-percent U.S. unemployment rate may have been consistent with an acceptably low rate of inflation in the mid-1950s, by the 1960s this proposition had become increasingly doubtful. Our experience since then has been such that those who accept the customary definition of the full-time U.S. unemployment rate now consider 4.5 percent to be the optimal rate under the existing circumstances.
The principal reason for this upward adjustment in the full-time U.S. unemployment rate is the changed composition of the labor force. As the labor force becomes increasingly composed of elderly people and women, the number of workers has increased. Similarly, the number of workers who are now eligible to collect benefits has increased. To the extent that these changes have increased voluntary and involuntary layoff rates and the average length of time unemployed persons spend looking for work, the full-time unemployment rate has risen.

Q1:

According to the passage, all of the following factors must be considered in estimating the full-time unemployment rate EXCEPT

A) the percentage of women in the work force

B) the ratio of the number of unemployed workers to the number of vacant positions

C) the strength of inflationary tendencies in the economic system

D) the number of young people in the job market

E) the availability of financial help for those who are out of work

Question # 2
The passage implies that the extension of unemployment insurance to new groups of workers and the lengthening of the period for benefit payments may have encouraged:
I. Layoffs of workers by employers.
II. Abandonment of unsatisfactory jobs by employees.
III. Longer periods of job hunting by unemployed workers.

A) I only

B) I and II only

C) I and III only

D) II and III only

E) I, II, and III

Question # 3
The primary purpose of the passage is to

A) define a term

B) correct a misconception

C) suggest a new theory

D) pose a dilemma

E) make a prediction

Question # 4
The passage provides information to answer which of the following questions?

A) Why is a zero unemployment rate unlikely ever to be attained?

B) What is the likely future trend of the full-employment unemployment rate?

C) Why has the percentage of younger workers in the job market increased?

D) What rate of inflation is generally considered to be the highest acceptable rate?

E) To what extent do workers tend to quit their jobs as a result of increased unemployment benefits?

B,C,E,A
Director
Joined: 01 Jan 2008
Posts: 512
Followers: 3

Kudos [?]: 52 [0], given: 0

Re: RC: full-time unemployment rate [#permalink]

### Show Tags

30 Jun 2008, 01:45

E E A A
Senior Manager
Joined: 07 Jan 2008
Posts: 407
Followers: 3

Kudos [?]: 231 [0], given: 0

Re: RC: full-time unemployment rate [#permalink]

### Show Tags

30 Jun 2008, 04:14
OA:
B
E
A
A
Director
Joined: 14 Aug 2007
Posts: 733
Followers: 10

Kudos [?]: 190 [0], given: 0

Re: RC: full-time unemployment rate [#permalink]

### Show Tags

01 Jul 2008, 21:42
lexis wrote:
The full-time unemployment rate cannot be determined with great precision. One thing is certain: it cannot be zero or even close to zero. A zero unemployment rate would mean that no one ever entered or re-entered the labor force, that no one ever quit a job or was laid off, and that for new entrants or re-entrants, the process of searching for a job consumed no time. Moreover, full-time employment cannot be defined as an equality between the number of unemployed persons and the number of unfilled jobs. By this definition, almost any unemployment rate could be consistent with the full-time employment rate.
The customary definition of the full-time U.S. unemployment rate is the lowest rate of unemployment that can be attained without resulting in an accelerated rate of inflation, given the existing economic conditions. However, no one can be sure exactly what the unemployment rate is, based on this definition, since it is not possible to predict exactly how great a change in the rate of inflation will be associated with any given change in the unemployment rate. In the early 1960s, President Kennedy's Council of Economic Advisors (CEA) determined that 4 percent was the best estimate of the full-time U.S. unemployment rate. That rate was based on data collected during the period from mid-1955 to mid-1957, when the U.S. unemployment rate fluctuated around an average of 4.1 percent and the consumer price index advanced at an average rate of 2.5 percent per year. Although a 4-percent U.S. unemployment rate may have been consistent with an acceptably low rate of inflation in the mid-1950s, by the 1960s this proposition had become increasingly doubtful. Our experience since then has been such that those who accept the customary definition of the full-time U.S. unemployment rate now consider 4.5 percent to be the optimal rate under the existing circumstances.
The principal reason for this upward adjustment in the full-time U.S. unemployment rate is the changed composition of the labor force. As the labor force becomes increasingly composed of elderly people and women, the number of workers has increased. Similarly, the number of workers who are now eligible to collect benefits has increased. To the extent that these changes have increased voluntary and involuntary layoff rates and the average length of time unemployed persons spend looking for work, the full-time unemployment rate has risen.

Q1:

According to the passage, all of the following factors must be considered in estimating the full-time unemployment rate EXCEPT

A) the percentage of women in the work force

B) the ratio of the number of unemployed workers to the number of vacant positions
full-time employment cannot be defined as an equality between the number of unemployed persons and the number of unfilled jobs.

C) the strength of inflationary tendencies in the economic system

D) the number of young people in the job market

E) the availability of financial help for those who are out of work

Question # 2
The passage implies that the extension of unemployment insurance to new groups of workers and the lengthening of the period for benefit payments may have encouraged:
I. Layoffs of workers by employers. (Involuntary layoff)
II. Abandonment of unsatisfactory jobs by employees. (Voluntary layoff)
III. Longer periods of job hunting by unemployed workers. (the average length of time unemployed persons spend looking for work)
A) I only

B) I and II only

C) I and III only

D) II and III only

E) I, II, and III

Question # 3
The primary purpose of the passage is to

A) define a term

B) correct a misconception

C) suggest a new theory

D) pose a dilemma
(I was inclined to choose this, but then thought this can't be the intension of any passage in GMAT..at least for non-test takers )

E) make a prediction

Question # 4
The passage provides information to answer which of the following questions?

A) Why is a zero unemployment rate unlikely ever to be attained?
B) What is the likely future trend of the full-employment unemployment rate?

C) Why has the percentage of younger workers in the job market increased?

D) What rate of inflation is generally considered to be the highest acceptable rate?

E) To what extent do workers tend to quit their jobs as a result of increased unemployment benefits?
Senior Manager
Joined: 29 Aug 2005
Posts: 281
Followers: 2

Kudos [?]: 57 [0], given: 0

Re: RC: full-time unemployment rate [#permalink]

### Show Tags

01 Jul 2008, 21:58
HI Guys

i got three questions of this RC correct (as per the OA), but my question is regarding Q 3
can u please explain the reasons for u r choice

i ended up picking D on this where as the OA says A for this question

u r comments will be welcome

Thanks

P.S. what is the source of this RC
_________________

The world is continuous, but the mind is discrete

Senior Manager
Joined: 07 Jan 2008
Posts: 407
Followers: 3

Kudos [?]: 231 [0], given: 0

Re: RC: full-time unemployment rate [#permalink]

### Show Tags

01 Jul 2008, 22:48
vdhawan1 wrote:
HI Guys

i got three questions of this RC correct (as per the OA), but my question is regarding Q 3
can u please explain the reasons for u r choice

i ended up picking D on this where as the OA says A for this question

u r comments will be welcome

Thanks

P.S. what is the source of this RC

Along the passage, author focuses on full-time employment rate. You can find full-time employment rate definition in almost main point of each paragraph.
Senior Manager
Joined: 06 Jul 2007
Posts: 285
Followers: 3

Kudos [?]: 51 [0], given: 0

Re: RC: full-time unemployment rate [#permalink]

### Show Tags

01 Jul 2008, 23:26
fresinha12 wrote:
i will go with B E A A

B
Moreover, full-time employment cannot be defined as an equality between the number of unemployed persons and the number of unfilled jobs.

E
To the extent that these changes have increased voluntary and involuntary layoff rates and the average length of time unemployed persons spend looking for work, the full-time unemployment rate has risen.

A--i guess everyone got this one right..

A
A zero unemployment rate would mean that no one ever entered or re-entered the labor force, that no one ever quit a job or was laid off, and that for new entrants or re-entrants, the process of searching for a job consumed no time

Lexis please post OA..i dont think many partcipants here will actually attempt RC questions..

couldn't understand why the last two are A and A. could you please care to explain?
Re: RC: full-time unemployment rate   [#permalink] 01 Jul 2008, 23:26
Similar topics Replies Last post
Similar
Topics:
7 Companies that must determine well in advance of the 7 16 Jan 2013, 06:05
7 Changes in the volume of unemployment are governed by three 9 03 Jan 2011, 06:35
The sensation of pain cannot accurately be described as 9 09 Nov 2010, 22:38
2 The full-time unemployment rate cannot be determined with 2 20 Feb 2010, 16:15
1 In choosing a method for determining climatic conditions 6 14 Jan 2008, 22:15
Display posts from previous: Sort by