The full-time unemployment rate cannot be determined with great precis

Question

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.   1 
 1. 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

2 
 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

3 
 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

4 
 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?

RC Butler 2021  -  Practice Two RC Questions Everyday.   
Passage # 67 Date: 17-Feb-2021
 This question is a part of RC Butler 2021 .  Click here for Details

LipiSinha · Accepted Answer

Q1.
In this question every option Except one must be considered in estimating the full-time unemployment rate.

A. is incorrect. The author states there has been an "upward adjustment" in the full-time US unemployment rate. This has happened because, "As the labor force becomes increasingly composed of elderly people and women, the number of workers has increased." (last para, line 3). Therefore, this is one of the factors that should be considered.

B. is correct. The author explicitly states this in the 1st paragraph - "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."

C. is another factor affecting the unemployment rate. This is mentioned at the start of the 2nd paragraph.

D. This also affects the unemployment rate. In fact, it has a direct correlation to the upward adjustment of the full-time US unemployment rate (as mentioned in the last para).

E. This also affect the unemployment rate. Consists of elderly people who are "now eligible to collect benefits".

Q2.
 E. is the correct answer. This is explicitly mentioned in the last paragraph.
I. is the "involuntary layoff rates".
II. is the "voluntary layoff rates".
III. is the "average length of time unemployed persons spend looking for work".

Q3. 
 A. is the correct answer. The author introduces a term (full-time unemployment rate) in the 1st line of the 1st para. Further in the 1st para, he argues what could not be the definition of this term.
In the 2nd para, he talks about the "customary definition" of the term. He builds further on this in the 2nd para and mentions about the accepted rate and how it has changed. In the last para, he talks about the factors that affect the term introduced initially.
Throughout the passage the author is trying to define the term "full-time unemployment rate".
 
B. The author nowhere in the passage talks about any misconception.

C. The author doesn't suggest a new theory. He simply introduces a term, and elaborates on it, trying to define it.

D. The author does not pose any dilemma. He is explicit in suggesting as to how to define a term and how not to define it.

E. The author does not make any prediction anywhere in the passage.

Q4.
 A. is correct. The answer to this question is right there in the 1st paragraph. "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."
 
The answer to any other question (B, C, D, and E) is not mentioned in the passage.

Oppenheimer1945 · Answer

Sajjad1994

Pls explain why E is wrong in Q1?

“Similarly, the number of workers who are now eligible to collect benefits has increased“

How benefits and financial help be the same?

Posted from my mobile device

Sajjad1994 · Answer

Unfortunately this question seems debatable.

GmatFighter111 · Answer

q2 >  E 
I. Layoffs of workers by employers. 
II. Abandonment of unsatisfactory jobs by employees.
III. Longer periods of job hunting by unemployed workers.
I,II >> from the last para >>
Similarly, the number of  workers who are now eligible to collect benefits has increased . To the  extent  that these changes have increased voluntary  (II)  and involuntary  (I)  layoff rates and the average length of time unemployed persons spend looking for work  (III)

q3 >  A  
A) define a term >>  CORRECT 
B) correct a misconception >> There is no misconception here, they just explain why 0% cannot be attained
C) suggest a new theory >> No NEW theory
D) pose a dilemma >> no dilemma
E) make a prediction >> no prediction, just a suggested rate, but not to predict

q4 >  A 
right on the second sentence into the passage "One thing is certain: it cannot be zero or even close to zero. A zero unemployment rate would mean that ..... " 
and there is no other topic mentioned regarding other answer choices

samarpan.g28 · Answer

1. According to the passage, all of the following factors must be considered in estimating the full-time unemployment rate EXCEPT 
Clue in the first paragraph "Moreover, full-time employment cannot be defined as an equality between the number of unemployed persons and the number of unfilled jobs." Therefore (B) is correct.

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: 
Clue in the last paragraph "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." Therefore (E) is correct.

3. The primary purpose of the passage is to 
I read the first line of the last paragraph "The principal reason for this upward adjustment in the full-time U.S. unemployment rate is the changed composition of the labor force." and selected (B) as answer, got it wrong. But in the first paragraph, it clearly defines what unemployement rate is from "The full-time unemployment rate cannot be determined with great precision." Furthermore, in paragraph 2, it says "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." Therefore, (A) is correct.

4. The passage provides information to answer which of the following questions? 
Clue in the first paragraph "One thing is certain: it cannot be zero or even close to zero." Option (A) is correct.

The full-time unemployment rate cannot be determined with great precis

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The full-time unemployment rate cannot be determined with great precis

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