4) Suppose you measured the gap between the unemployment rate and the natural rate ofunemployment: gap = unemployment rate natural rate of unemploymenta) What would happen to this gap if fewer people decide to become housewives orhousehusbands but enter the labor market?b) What would happen to this gap during a recession?

When talking about natural rate of unemployment, it is the unemployment rate in the long-run, while…

4) Suppose you measured the gap between the unemployment rate and the natural rate of unemployment rate natural rate of unemployment nemployment: gap a) What would happen to this gap if fewer people decide to become housewives or househusbands but enter the labor market? b) What would happen to this gap during a recession?

4) Suppose you measured the gap between the unemployment rate and the natural rate of unemployment rate natural rate of unemployment nemployment: gap a) What would happen to this gap if fewer people decide to become housewives or househusbands but enter the labor market? b) What would happen to this gap during a recession?

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter21: Unemployment

Section: Chapter Questions

Problem 44CTQ: The U.S. unemployment rate increased from 4.6 in July 2001 to 5.9 by June 2002. Without studying the...

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Is the increase in labor force participation rates among women better thought of as causing an increase in cyclical unemployment or an increase in the natural rate of unemployment? Why?
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s Assume you have the following information about an economy: Labor Force of an Economy Sumber of People (nillions) 243.8 153.6 90.2 144.2 Population over age 16 Labor force Not in the labor force Employed Unemployed Instructions: Round your answers to two decimal places a. What is the unemployment rate in this economy? b. What is the labor force participation rate? c. Assume that 0.9 million discouraged workers decide to start looking for work again, thereby increasing the number of officially unemployed workers by 0.9 million. What is the unemployment rate now? d. What is the new labor force participation rate?
1. Suppose you are given the following data for a small economy: Number of unemployed workers: 1,000,000. Labor force: 10,000,000. Based on this data, answer the following: What is the unemployment rate? Can you determine whether the economy is operating at its full employment level? Now suppose people who had been seeking jobs become discouraged, and give up their job searches. The labor force shrinks to 900,500 workers, and unemployment falls to 500,000 workers. What is the unemployment rate now? Has the economy improved? 2. Nominal GDP for an economy is $10 trillion. Real GDP is $9 trillion. What is the value of the implicit price deflator? 3. Suppose you compare your income this year and last year and find that your nominal income fell but your real income rose. How could this have happened? 4. Suppose that people expect inflation to equal 3 percent, but in fact prices rise by 5 percent. Indicate whether this unexpected higher rate of inflation would help or hurt…
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3. Discuss some problems with using the unemployment rate as a barometer for the health of the labor market.
What is natural rate of unemployment? When do we say an economy has full employment? 2. Identify what type of unemployment will result from the following scenarios a. Jane has completed college and quit her job at Tim Horton so she can work full-time in her marketing field: b. The clothing store George used to work for was shut down as the clothing brand is now selling all its collection through its online website: c.The business Hank was working for had to shut down as there has been a decrease in overall demand in the economy: