Question

Which of these people is part of the labor force?

Answer 1

The people that is part of the labor force is option D: an auto mechanic

The best example of frictional unemployment is option D: a company moving to another state, leaving its workforce without jobs

The ways that the economy is affected when the unemployment rate goes up are option B and C:

• Sales tax rates go down.
• Less money is spent on investments.

The most likely result of incomes not rising as quickly as inflation is option  B: The unemployment rate rises as more people look for jobs.

The way the standard of living in the United States generally changed over the past 100 years is option B: It has gotten much better.

What do the terms "labor force" and "work force" mean?

The labor force is the whole population that is actively seeking employment. It is measured in terms of the number of days and is independent of wage rates. The workforce is the total number of people who are really employed.

Short-term unemployment includes frictional unemployment. When someone actively seeks a job or a new career, they are said to be in a frictional state of unemployment. Unemployment that is only intermittent isn't always a terrible thing. In fact, since it's voluntary, frictional unemployment may be a sign of a strong economy.

Hence, the term "workforce" or "labor force" refers to the group of people who are either employed or unemployed and an auto mechanic is a  good example of it.

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