Daily quiz-21 (03/21): Print your name and ID in BLOCK letters. In one year, you meet 52 people who are each unemployed for one week and eight people who are each unemployed for the whole year. 1. What percentage of the unemployment spells you encountered was short-term? Ans: Total spells of unemployment = 52 + 8 = 60. % of spells which are short term = 52/60 or 86.87%. 2. What percentage of the unemployment you encountered in a given week was long-term? Ans: You meet 9 unemployed persons every week, of which 8/9 or 88.89% are long term unemployed. Suppose that some people report themselves as unemployed when, in fact, they are working in the underground economy (say trading in illegal substances). 3. If these persons were counted as employed, what would happen to the unemployment rate? Ans: U-rate will fall. 4. If these persons were counted as employed, what would happen to the labor force participation rate? Ans: Participation rate does not change.