Consider the following measures of labor market conditions for December 2013 and December 2014: Measure December 2013 December 2014 Persons unemployed 15 wks or longer (as % of workforce) 3.6 2.6 U6 Unemployment rate 13.1 11.2 U3 Unemployment rate 7.9 5.6 Discouraged workers 2.3 2.5 a. Discuss the difference between U3 and U6, which do you think is a better measure of unemployment and why? b. If we were in the midst of a recession would this change? Why or why not? c. Discuss the arguments why "discouraged workers" should or should not be included in calculating the unemployment rate. Finish with side of the argument stating you find most convincing and why. d. Are there alternative measures of labor market performance you believe would be useful in understanding the state of the overall labor market
Consider the following measures of labor market conditions for December 2013 and December 2014: Measure December 2013 December 2014 Persons unemployed 15 wks or longer (as % of workforce) 3.6 2.6 U6 Unemployment rate 13.1 11.2 U3 Unemployment rate 7.9 5.6 Discouraged workers 2.3 2.5 a. Discuss the difference between U3 and U6, which do you think is a better measure of unemployment and why? b. If we were in the midst of a recession would this change? Why or why not? c. Discuss the arguments why "discouraged workers" should or should not be included in calculating the unemployment rate. Finish with side of the argument stating you find most convincing and why. d. Are there alternative measures of labor market performance you believe would be useful in understanding the state of the overall labor market
Chapter18: Introduction To Macroeconomics: Unemployment, Inflation, And Economic Fluctuations
Section: Chapter Questions
Problem 6P
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Consider the following measures of labor market conditions for December 2013 and December 2014:
| Measure | December 2013 | December 2014 |
| Persons unemployed 15 wks or longer (as % of workforce) | 3.6 | 2.6 |
| U6 |
13.1 | 11.2 |
| U3 Unemployment rate | 7.9 | 5.6 |
| Discouraged workers | 2.3 | 2.5 |
a. Discuss the difference between U3 and U6, which do you think is a better measure of unemployment and why?
b. If we were in the midst of a recession would this change? Why or why not?
c. Discuss the arguments why "discouraged workers" should or should not be included in calculating the unemployment rate. Finish with side of the argument stating you find most convincing and why.
d. Are there alternative measures of labor market performance you believe would be useful in understanding the state of the overall labor market?
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