Principles of Macroeconomics (12th Edition)
12th Edition
ISBN: 9780134078809
Author: Karl E. Case, Ray C. Fair, Sharon E. Oster
Publisher: PEARSON
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Question
Chapter 13, Problem 1.2P
Sub part (a):
To determine
Labor force participation, labor supply, and
Sub part (b):
To determine
Labor force participation, labor supply, and unemployment.
Sub part (c):
To determine
Labor force participation, labor supply, and unemployment.
Sub part (d):
To determine
Labor force participation, labor supply, and unemployment.
Sub part (e):
To determine
Labor force participation, labor supply, and unemployment.
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Economists use labor-market data to evaluate how well an economy is using its most valuable resource— its people. Two closely watched statistics are the unemployment rate and the employment–population ratio (calculated as the percentage of the adult population that is employed). Explain what happens to each of these in the following scenarios. In your opinion, which statistic is the more meaningful gauge of how well the economy is doing?
Situations
unemployment rate
employment–population ratio
More meaningful one
a. An auto company goes bankrupt and lays off its workers, who immediately start looking for new jobs
b. After an unsuccessful search, some of the laid-off workers quit looking for new jobs.
c. Numerous students graduate from college but cannot find work.
d. Numerous students graduate from college and immediately begin new jobs.
e. A stock market boom induces newly enriched 60-year-old workers to take early retirement.…
Economists use labor-market data to evaluate how well an economy is using its most valuable resource—its people. Two closely watched statistics are the unemployment rate and the employment–population ratio (calculated as the percentage of the adult population that is employed).
Indicate what happens to the unemployment rate and the employment–population ratio in each of the following scenarios.
Scenario
Effect On...
Unemployment Rate
Employment–Population Ratio
An auto company goes bankrupt and lays off its workers, who immediately start looking for new jobs. After an unsuccessful search, some laid-off workers quit looking for new jobs. Numerous students graduate from college and immediately begin new jobs. Advances in health care prolong the lives of many retirees.
Economists use labor-market data to evaluate how well an economy is using its most valuable resource—its people.
Two closely watched statistics are the unemployment rate and the employment–population ratio (calculated as the percentage of the adult population that is employed).
Indicate what happens to the unemployment rate and the employment–population ratio in each of the following scenarios.
Scenario
Effect On...
UNEMPLOYMENT RATE
EMPLOYMENT POPULATION RATION
Many previously laid-off workers find jobs in new startup firms as the economy expands.
(DECREASE, INCREASE OR STAY THE SAME)
(DECREASE, INCREASE OR STAY THE SAME)
After an unsuccessful search, some laid-off workers decide to go back to school as full-time students.
(DECREASE, INCREASE OR STAY THE SAME)
(DECREASE, INCREASE OR STAY THE SAME)
As a result of an economic boom, many students drop out of school and start working as soon as they become adults.
(DECREASE,…
Chapter 13 Solutions
Principles of Macroeconomics (12th Edition)
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Similar questions
- Assess whether the following would be counted as unemployed in the Current Employment Statistics survey. A husband willingly stays home with children while his wife works. A manufacturing worker whose factory just closed down. A college student doing an unpaid summer internship. A retiree. Someone who has been out of work for two years but keeps looking for a job. Someone who has been out of work for two months but isnt looking for a job. Someone who hates her present job and is actively looking for another one. Someone who decides to take a part time job because she could not find a full time position.arrow_forwardWould you expect the natural rate of unemployment to remain the same within one country over the long run of several decades?arrow_forwardThe following data pertains to Googa, an economy. Population:258 million. Population 16 years and under or institutionalized: 116 million. Population employed: 89 million. Population unemployed: 3 million. Population employed part time, but willing to work full time 16 million. Population currently not employed, not seeking employment, but willing and able to work 5 million. a. what is the labor force in Googa? b. what is the unemployment rate in Googa?arrow_forward
- Economists use labour-market data to evaluate how well an economy is using its most valuable resource— its people. Two closely watched statistics are the unemployment rate and the employment-population ratio. Explain what happens to each of these in the following scenarios. In your opinion, which statistic is the more meaningful gauge of how well the economy is doing? a. An auto company goes bankrupt and lays off its workers, who immediately start looking for new jobs. b. After an unsuccessful search, some of the laid-off workers quit looking for new jobs. c. Numerous students graduate from college but cannot find work. d. Numerous students graduate from college and immediately begin new jobs. e. A stock market boom induces newly enriched 60-year-old workers to take early retirement. f. Advances in healthcare prolong the life of many retireesarrow_forwardIn June 2009, at the trough of the Great Recession, the Bureau of Labor Statistics announced that of all adult Americans, 140,196,000 were employed, 14,729,000 were unemployed, and 80,729,000 were not in the labor force. a) What was the size of the labor force in 2009? Show your work. b) What was the labor-force participation rate in 2009? Show your work. c) What was the unemployment rate in 2009? Show your work.arrow_forwardIn March 2016 American employers added 215,000 positions to their payrolls, bringing the average job increase for the year to more than 200,000 per month. At the same time, though, the official unemployment rate actually went up, from 4.9% to 5.0%. What is a likely explanation? The labor force has decreased “Discouraged workers” re-entered the labor force The number of people working part-time has increased The number of volunteering positions in the U.S. economy has decreasedarrow_forward
- Which of the following people would be unemployed (or belonging to any labor market group) according to official statistics? Shortly explain why or why not. f(e) A worker who quits his job because he thinks the pay is insufficient. (f) A teenager who gets discouraged looking for work and stops lookingarrow_forwardThe number of adults not in the labor force of a country equals 6 million, and the number of individuals employed is 5 million. If there are 12 million potential adult workers in the economy, what is the current unemployment rate in this country? 45 percent 67 percent 21 percent 55 percent If the opportunity cost of working outside the home increases, then ________ the labor supply curve, assuming all else equal. there will be a left shift in there will be a right shift in there will be an upward movement along there will be a downward movement along Which of the following statements is true? Technological innovation always leads to unemployment in an economy as a whole. Technological innovation can cause wages to fall for some workers in an economy. Technological innovation increases wages for all workers in an economy. Technological innovation reduces the demand for goods and services in an economy. If the annual inflation rate in an economy is i, then $1 borrowed at the…arrow_forwardkindly assist Which of the following individuals may NOT be considered unemployed in official labor statistics?A. A recent college graduate actively seeking their first job.B. A retiree who has left the workforce and does not wish to work.C. A part-time worker who wants a full-time job but cannot find one.D. A person who lost their job and is actively looking for new employment.arrow_forward
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