CFA Practice Question
Which one(s) of the following would be classified as employed?
II. A parent who works 50-60 hours per week caring for family members
III. A 21-year-old full-time college student
IV. A 17-year-old high school student who works six hours per week as a route person for the local newspaper
I. An auto worker vacationing in Florida during a layoff at a General Motors plant due to an annual change-over in models
II. A parent who works 50-60 hours per week caring for family members
III. A 21-year-old full-time college student
IV. A 17-year-old high school student who works six hours per week as a route person for the local newspaper
A. All of them
B. I, II and IV
C. IV only
Explanation: A person who is not actively looking for a job is not a member of the labor force and therefore is not employed. An individual who is not a member of the formal market and works at home without wages is not a member of the formal labor force. An auto worker who is waiting to be retired or who was laid off is considered unemployed.
User Contributed Comments 18
| User | Comment |
|---|---|
| shasha | 17 is old enough to be treated as labor force? |
| sireklove | I think the minimum age is 16. However, my econ book from college says someone is considered employed if they "spent most of the previous week working at a job". I didn't think the 17 year old counted as employed because of the low number of weekly hours. |
| KD101 | I thought working 6 hrs per week is not considered employed |
| Will1868 | I agree - six hours is too little - also doesn't the unemployment rate adjust for seasonal trends like answer A |
| lemec | Labor force is anyone over 16. Even if they work 1 hr, they are considered employed. ie no difference between parttime and fulltime |
| lwang014 | 6 hours (part-time)=employed? |
| tapiwa | I think this is a bit dubious! it tests the actual ldefinition of "unemployment" rather than the definition of "Employment". Thus if we conclude that the other 3 options are unemployed, the last option must by default be "employed" |
| dimos | I agree with lemec. A part-time worker is considered employed |
| cpt28 | Employed persons = Persons 16 years and over in the civilian noninstitutional population who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees ............ source: US Department of Labor, Bureau of Labor Statistics, Glossary |
| takor | a part time worker should reasonably be considered employed. Could there be anything as 'part-time unemployment'? |
| dlukas | The question doesn't specify that the auto worker in (A) was laid off. The fact that he's vacationing to me implies that he is temporarily and voluntarily not working. |
| takor | dlukas, i think the words 'layoff' and 'change over in models' suggest that the autoworker in (A) is 'structurally un-employed'. |
| mindi | unemployment is NO work at all, 6 hours is probably underemployed, meaning not working as much hours as one would like |
| jpducros | Would a guy in vacation considered unemployed ?? |
| fmhp | How are we supposed to know that the guy working at home does not get any wages? |
| Andy552 | There's actually three definitions here:- employed - i.e. receiving wages unemployed - not receiving any wages but looking for work. inactive - not receiving any wages but not not looking for paid work either. I would argue that the first three would be classified as inactive and therefore not employed. The fact that the question says, caring for his family would suggest its not paid caring work. |
| cbracho54 | i actually thought the father works 60 hours to "care" for his family.. with caring meaning bringing some $$ into the house lol |
| langerhans | cbracho54, I'm embarassed to admit I did the same thing |