ECO 3302 CH. 7 Review

An economy has 100 people divided among the following groups: - 25 have full-time jobs - 20 have one part-time job - 5 have two part-time jobs - 10 would like to work and are looking for jobs - 10 would like to work but are discouraged, so they have given up looking - 10 are running their own businesses - 10 are retired - 10 are children The total number of unemployed people equals:

10 Unemployed people are considered those that are actively looking for jobs but have not found one: 10 looking for jobs

An economy has 100 people divided among the following groups: - 25 have full-time jobs - 20 have one part-time job - 5 have two part-time jobs - 10 would like to work and are looking for jobs - 10 would like to work but are discouraged, so they have given up looking - 10 are running their own businesses - 10 are retired - 10 are children The unemployment rate equals:

14.29 The unemployment rate = (unemployed/labor force)* 100 = (10/70)*100 = 14.29%

An economy has 100 people divided among the following groups: - 25 have full-time jobs - 20 have one part-time job - 5 have two part-time jobs - 10 would like to work and are looking for jobs - 10 would like to work but are discouraged, so they have given up looking - 10 are running their own businesses - 10 are retired - 10 are children The total number of people NOT in the labor force equals:

20 Those not in the labor force include all adult civilians that do not want to work or are eligible to not work (retired, students not working, disabled, and the discouraged who are not looking for jobs). 10 (retired) + 10 (discouraged) = 20 or 90 (adult pop) - 70 (labor force) = 20

An economy has 100 people divided among the following groups: - 25 have full-time jobs - 20 have one part-time job - 5 have two part-time jobs - 10 would like to work and are looking for jobs - 10 would like to work but are discouraged, so they have given up looking - 10 are running their own businesses - 10 are retired - 10 are children The labor force equals:

70 The labor force includes all adult civilians that can, and want to work, whether they have a job or are searching. It does not matter which kinds or how many jobs. People are counted, NOT jobs 25 (full-time) + 20 (1 part-time) + 5 (2 part-times) + 10 (self-employed) + 10 (looking for jobs) = 70 in the Labor Force

An economy has 100 people divided among the following groups: - 25 have full-time jobs - 20 have one part-time job - 5 have two part-time jobs - 10 would like to work and are looking for jobs - 10 would like to work but are discouraged, so they have given up looking - 10 are running their own businesses - 10 are retired - 10 are children The labor force participation rate equals:

77.78 Labor force Participation Rate (LFPR) = Labor Force (LF) / Civilian Adult population (70/90)*100 = 77.78

An economy has 100 people divided among the following groups: - 25 have full-time jobs - 20 have one part-time job - 5 have two part-time jobs - 10 would like to work and are looking for jobs - 10 would like to work but are discouraged, so they have given up looking - 10 are running their own businesses - 10 are retired - 10 are children The Civilian adult population equals:

90 Civilian adult population includes everyone except for the military and children (who are less than 16 years old). 100 (pop) - 10 (children) = 90

The rise of the employment-population ratio in the U.S. is most likely explained by:

An increase in female participation in the labor force The employment-population ratio for women has rise from 35% to 58% from 1960 to 2000

When computing the present discounted value (pdv) of a future stream of labor income, an increase in the interest rate will

Reduce the pdv

According to the bathtub model of unemployment, which of the following statements is true if a law permanently increases only the job finding rate?

The natural rate of unemployment will fall. The bathtub model equilibrium is a steady-state equilibrium. A steady-state equilibrium is a long-run phenomenon, which implies the equilibrium of the model is representative of the natural rate rather than the actual rate of unemployment in any particular period.