Eco 561 Week 4 Quiz Free Essay

The unemployment rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month. Unemployment is termed as a major health of the economy and every country tries to reduce unemployment rate for sustainable growth. It is referred as the number of unemployed workers divided by the total civilian labour force. Every economy tries to ensure full employment in the country but there is the existence of natural rate of unemployment though nation tries hard to obtain full employment in the country.

The unemployment rate is calculated by measuring the number of unemployed over the total labour force (anyone 15 years or older who currently has a job or is actively seeking) [x100]. While the government does not aim for 0% unemployment as this has negative consequences, it is

a. Say we are already suffering the long-run consequences of the policies of the remote or recent past.

Question 32 Which of the following conditions might cause the unemployment rate to be less than the natural rate of unemployment?

The economy has a continuing path of expansion and contraction; these are the fluctuations that create a business cycle. The GDP gives the sum total of consumer spending, industry investment, exports compared to imports and our government spending. The GDP increase does not reflect the correct growth of the economy and inflation must be subtracted to reflect the true percentage, this is called the real GDP and tells us if the economy is expanding or contracting. If the economy falls we start a recession. The point when expansion becomes a recession becomes the peak of business cycle and the point when recession becomes expansion is the trough.

Figure 1. A pie chart showing each type of unemployment, validating that frictional unemployment has the leading numbers of 55%. A percentage that may perhaps be easily decreased if the proper resources are introduced to better connect workers with firms, and firms with

Unemployment refers to the numbers of people not working and can be measured by the claimant count and labour force survey. There are different types of unemployment and each of them requires different policies to overcome them.

Obviously unemployed rate is defined as “the fraction of the labor force that is unemployed” . To define the unemployed is important as well, because it refers to those that have no job, but are actively looking for work, not to those who are not working and are uninterested in searching or getting a job . The reason that unemployment is so important in determining the economy’s success is because it is intertwined with the gross domestic product, as in when the gross domestic product falls, unemployment is increased, and when it rises, there is a decrease in unemployment . To make what is being explained clearer, when there is unemployment, production is down; therefore there is less money and goods produced out of the economy. This is how unemployment relates as well.

The official measure of unemployment is the U-3 index which is the percentage of the labor face unemployed for fifteen weeks or longer. Because this indicator can only confirm the long-term trend of unemployment it is considered a lagging indicator. In the most recent U-3 report, the unemployment rate held steady at 5%. This figure is close to what is considered full employment by economists (4.7% unemployment), and consequently bodes well for the overall economy. Moreover, since the last economic downturn, the Great Recession, the unemployment rate has consistently declined (from a peak of 10% in November 2009), indicating that the US economy is growing and that more Americans are able to sustain themselves and thus pump more money back into the economy with their expenditures. Therefore, the current unemployment figure is indicative of the strong state of the

Two other major indicators come from the Bureau of Labor Statistics. The unemployment rate in March 2008 was 5.1% and today it is 7.7%. The 5.1% figure is around normal for that period of time, while today's figure is an improvement over the levels of the past four years. It is worth considering that unemployment is a lagging indicator, but even with that it is clear that the economy is doing more poorly today than it was in early 2008.

Unemployment refers to the number of unemployed individuals living in the country compared to the total number of the labor force. Unemployment

(a) Describe the relevant criteria that the United States use to determine whether a person is ‘unemployed’ and what problems do you see using this measure?

This can generally be defined as the ratio of those who are unemployed to the total civilian labor force. The resulting figure should in this

According to John Sloman and Alison Wride (2010, p.32) unemployed person is considered to be the one who is without work, but is available for a one at current wage rates. Unemployment, however, is not only a personal issue but also a big social and economic problem, which leads to lost in human capital, incomes, production and lowering the standard of living as a whole. Depending on what is the cause of it, unemployment may be divided into frictional, structural and cyclical, where frictional and structural form the so called natural unemployment.

Money is essential to any individual looking to have a decent lifestyle; labor is the avenue through which this is acquired. The economy goes through various fluctuations in activity causing unemployment to fall, rise, or level out. What this creates is the first type of unemployment, known as cyclical; frictional is the second type, caused by a temporary leave (for whatever reason) by the employee, and structural is the third type, varying with the economic changes in demand. The absence of unemployment at its maximum level is termed full employment, another version of unemployment. The term encompassing the sum of the frictional, structural, and, yet another type of unemployment, surplus unemployment is that of the natural rate of