Suppose that in an economy the structural unemployment rate is 2.1 percent, the frictional unemployment rate is 2.3 percent, and the unemployment rate is 12.1 percent. The natural unemployment rate is percent and the cyclical unemployment rate is percent.
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- What type of unemployment (cyclical, frictional, or structural) applies to each of the following: landscapers laid off in response to a drop in new housing construction during a recession. coal miners laid off due to EPA regulations that shut down coal fired power a financial analyst who quits his/her job in Chicago and is pursing similar work in Arizona printers laid off due to drop in demand for printed catalogues and flyers as firms go the internet to promote an advertise their products. factory workers in the U.S. laid off as the plants shut down and move to Mexico and Ireland.Would you expect hidden unemployment to be higher, lower, or about the same when the unemployment rate is high, say 10, versus low, say 4? Explain.What term describes the remaining level of unemployment that occurs even when the economy is healthy?
- 3- What type of unemployment (cyclical, frictional, or structural) applies to each of the following: landscapers laid off in response to a drop in new housing construction during a recession. coal miners laid off due to EPA regulations that shut down coal fired power a financial analyst who quits his/her job in Chicago and is pursing similar work in Arizona printers laid off due to drop in demand for printed catalogues and flyers as firms go the internet to promote an advertise their products. factory workers in the U.S. laid off as the plants shut down and move to Mexico and Ireland.Which type of unemployment is not included in the natural unemployment rate? Why? Which phase of the business cycle does this type of unemployment occur in ? What is the economic cost of unemployment regarding production and the economy's GDP level ?In a country with a labor force of 200, a different group of 10 people becomes unemployed each month but becomes employed once again a month later. No others outside these groups are unemployed. EXPLAIN YOUR ANSWER!a. What is this country’s unemployment rate?b. What is the average duration of unemployment?c. Suppose that establishment of a system of unemployment compensation increases to twomonths the interval that it takes each group of job losers to become employed each month. Nevertheless, a different group of 10 people still becomes unemployed each month. Now what is the average duration of unemployment?d. Following the change discussed in part (c), what is the country’s unemployment rate?
- Suppose the economy has a population of 35 million people and a labor force participation rate of 50%. Furthermore, suppose the natural rate of unemployment in the economy is 6%. If the current number of unemployed people is 4 million people, what is the rate of cyclical unemployment rate? Answer: __________% (Cut off at the first decimal point.)2. Suppose you are the governor of Country A and you have observed some changes in your country. Identify the likely impact on Country A with the economic concepts we have discussed in this course. i. Establishment of more labour unions in many industries in the country ii. A widespread of global pandemiciii. An abolishment of minimum wage lawiv. Much more educated workers than a decade before How would the unemployment rate be affected in each of the above cases? Identify the specific type of unemployment (frictional, structural or cyclical unemployment) affected in each case.According to Okun’s Law, how much must U.S. real GDP grow in 1 year in order for the U.S. unemployment rate to decline by 1.5 percentage points in 1 year? According to Okun’s Law, how much must U.S. real GDP grow in 1 year in order for the U.S. unemployment rate to decline by 1.5 percentage points in 1 year? 6% 7% 5% 4%
- Assume an economy at a steady-state unemployment rate with a separation rate of 0.20 per year, a job finding rate of 0.60 per year, and the labor force comprised of 3000 individuals. a) Compute the long run unemployment rate. b) How many individuals find a job each year? c) How many individuals get unemployed each year? How many individuals get employed each year?The table below shows unemployment and labor force statistics for an economy. a: Calculate the size of the labor force. b: Calculate the labor force participation rate. c: Calculate what the cyclical unemployment rate would be if the actual rate of unemployment increased to 5 percent. d: Given the state of the economy described in the table, is actual real output less than, greater than, or equal to potential real output? Explain. e: Suppose discouraged workers reenter the labor force and find employment. Will the actual rate of unemployment increase, decrease, or stay the same? Actual rate of unemployment 3% Natural rate of unemployment 4% Population of the country 125 million Number of people employed 97 million Number of people unemployed 3 million Number of people employed part time 5 million Number of people discouraged workers 2 millionSuppose 25,000 persons become unemployed. You are given the following data about the length of unemployment spells in the economy:Duration of Spell (in months) Exit Rate1 0.602 0.203 0.204 0.205 0.206 1.00where the exit rate for month t gives the fraction of unemployed persons who have been unemployed t months and who “escape” unemployment at the end of the month.a. How many unemployment-months will the 25,000 unemployed workers experience?b. What fraction of persons who are unemployed are “long-term unemployed” in that their unemployment spells will last five or more months?c. What fraction of unemployment months can be attributed…
