PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
7th Edition
ISBN: 9781260110920
Author: Frank
Publisher: MCG
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Chapter 8, Problem 5RQ
To determine
Explain three types of
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Suppose the population of a fictional economy falls into the following categories: 28 million are retired or homemakers; 30 million have full-time employment; 24 million have one part-time job; 28 million have two part-time jobs; 12 million do not have employment, but are actively looking for employment; and 20 million would like employment but do not have employment and are not actively looking for employment. 5 million are under the age of 10.
a. Calculate the official unemployment rate (as a percentage, not decimals) as calculated by the U.S. Bureau of Labor Statistics. Round your answer to two decimal places.
Suppose the government wants to reduce this type of unemployment. Which of the following policies would help achieve this goal? Check all that apply.
Extending the number of weeks for which unemployed workers are eligible for unemployment insurance benefits from the government
Offering recipients of unemployment insurance benefits a cash bonus if they find a new job within a specified number of weeks
Establishing government-run employment agencies to connect unemployed workers to job vacancies
Suppose the population of a fictional economy falls into the following categories: 28 million are retired or homemakers; 30 million have full-time employment; 24 million have one part-time job; 28 million have two part-time jobs; 12 million do not have employment, but are actively looking for employment; and 20 million would like employment but do not have employment and are not actively looking for employment. 5 million are under the age of 10.
Calculate the official unemployment rate (as a percentage, not decimals)as calculated by the U.S. Bureau of Labor Statistics. Round your answer to two decimal places.
What is total employment as measured by the establishment survey? Use the numbers from Above
Chapter 8 Solutions
PRINCIPLES OF MACROECONOMICS(LOOSELEAF)
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- Q13 mcq Frictional unemployment is: unemployment that is due to the friction of competing ideological systems. unemployment caused by lack of training and education. unemployment caused by automation in the workplace. unemployment that is due to normal turnover in the labor market.arrow_forwardSuppose the population of a fictional economy falls into the following categories: 28 million are retired or homemakers; 30 million have full-time employment; 24 million have one part-time job; 28 million have two part-time jobs; 12 million do not have employment, but are actively looking for employment; and 20 million would like employment but do not have employment and are not actively looking for employment. 5 million are under the age of 10. What is the labor force participation rate (as a percentage, not decimals) for this economy? Use the numbers from Question abovearrow_forwardSuppose that Apple Inc. manufactures a new generation of iPhones that can ascertain whether your interlocutor is lying. Assuming that the price of this good will be higher than that of the currently marketed iPhone, comment on the CPI’s capability to correctly measure the corresponding change in the cost of living.arrow_forward
- [Consider the effects of an increase in the global price of oil. For a country such as Australia, which is a net exporter of oil, this development will imply that the CPI will increase roughly by the same amount as the increase in the GDP deflator.arrow_forwardSuppose the workingminus−age population of a fictional economy falls into the following categories: 90 are retired or homemakers; 60 have fullminus−time employment; 20 have partminus−time employment; 20 do not have employment, but are actively looking for employment; and 10 would like employment but do not have employment and are not actively looking for employment. The official unemployment rate as calculated by the U.S. Bureau of Labor would equal A. 30/80×100. B. 20/80×100. C. 20/100×100. D. 20/60×100.arrow_forwardThe following table contains U.S. employment information from February 2010. Civilian Population Employed Unemployed Discouraged (Persons 16 years old and over) (Persons) (Persons) (Persons) 236,998,000 138,698,000 14,860,000 1,204,000 The Bureau of Labor Statistics has several measures of joblessness in addition to the official unemployment rate. One alternative is the U-4 measure of labor underutilization, which takes into account discouraged workers and is calculated as follows: U-4U-4 = = 100×Unemployed+DiscouragedLabor Force + Discouraged100×Unemployed+DiscouragedLabor Force + Discouraged Fill in the following table by calculating the official unemployment rate and the U-4 measure of labor underutilization. Official Unemployment Rate U-4 Measure of Labor Underutilization (Percent) (Percent) The official unemployment rate and the U-4 measure of labor underutilization are two different measures of…arrow_forward
- Discuss natural unemployment and the factors influencing its level.arrow_forwardCommodity substitution bias _______ when the CPI is calculated in 2021 using the 2020 market basket because _______. A. exists; over time preferences change and people prefer to eat pizza rather than pasta B. does not exist; pizza and pasta are not substitutes C. exists; people switch from the relatively more expensive pasta to the relatively less expensive pizza D. does not exist; the CPI market basket is updated frequently to eliminate substitution biasarrow_forwardAlthough the unemployment rate is not a perfect measure (failing to account for potential increases in discouraged or underemployed workers), it remains a key indicator of a nation’s economic health. While Germany now enjoys a healthy unemployment rate of only 3.6% as of December 2017, the labor market has not always been booming in this European country. For example, as recently as 2005, German unemployment accounted for nearly 10% of the labor force. There are many factors that contributed to the turnaround of Germany’s labor market over the last decade, including wage decentralization and increased competitiveness according to an article from the Harvard Business Review (Alexandra Spitz-Oener, “The Real Reason the German Labor Market Is Booming,” March 13, 2017). However, one of the most well-known policy changes of the early 21st century was the Hartz reforms, which included a sharp decrease in unemployment benefits that altered the incentives of unemployed workers. Before the…arrow_forward
- Distinguish unemployment from the natural rate of unemployment.arrow_forwardThe three people described in the following table are categorized as unemployed by the Bureau of Labor Statistics. Identify each person in the table as structurally, frictionally, or cyclically unemployed. Unemployment Type Structural Frictional Cyclical Automobile demand has fallen during a recent recession, and Maria has been laid off from her job on the assembly line. Edison recently lost his job as a dishwasher. Minimum-wage legislation keeps employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work. Hilary is a physician who has decided to relocate to California to be closer to her family. She is currently interviewing with several prestigious hospitals in the San Francisco Bay Area. The following table shows data on frictional, cyclical, structural, and total unemployment for an economy. Unemployment Type Rate (Percent) Frictional 3.2…arrow_forwardExplain THREE specific reasons that could account for the differences observed in the unemployment rate for Jamaica and Barbados from 2009 to 2018arrow_forward
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