Macroeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (7th Edition)
7th Edition
ISBN: 9780134472669
Author: Blanchard
Publisher: PEARSON
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Chapter 13, Problem 3QAP
To determine
To know:Interpret the given statement.
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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).
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.
Three main ideas help explain why the prices of some services, such as education, health care, and the performing arts, continue to rise relative to those of other goods or services.
1. real wages in different occupations can rise at varying rates in the long run,
2. Real wages tend to rise at the same rate as labor productivity.
3. Productivity cannot or does not grow for certain services.
Using these three ideas, indicate which of the following statements about high school teachers and factory workers is true in accordance with the cost disease of the personal services? Select all that apply.
A. Wages of high school teachers will rise at a faster rate than the rate of productivity growth.
B. Because high school teachers are no more productive than they used to be but factory workers are, the real wage of factory workers must grow faster than that of high school teachers.
C. The services of high school teachers will become relatively more expensive than those of…
Three main ideas help explain why the prices of some services, such as education, health care, and the performing arts, continue to rise relative to those of other goods or services.
1. real wages in different occupations can rise at varying rates in the long run,
2. Real wages tend to rise at the same rate as labor productivity.
3. Productivity cannot or does not grow for certain services.
Using these three ideas, indicate which of the following statements about high school teachers and factory workers is true in accordance with the cost disease of the personal services? Check all that apply.
A. Wages of high school teachers will rise at a faster rate than the rate of productivity growth.
B. Because high school teachers are no more productive than they used to be but factory workers are, the real wage of factory workers must grow faster than that of high school teachers.
C. The services of high school teachers will become relatively more expensive than those of…
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Macroeconomics, Student Value Edition Plus MyLab Economics with Pearson eText -- Access Card Package (7th Edition)
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