HOMEWORK 22 ECON

The Bureau of Labor Statistics reported that in March 2015, the labor force in Michigan was 4,739,000, and employment was 4,467,000. What's the unemployment rate?

5.7%

Here are four statements about the types of unemployment. Which of these statements is correct? ((1)) An unemployed graduate searching for a first job is an example of frictional unemployment. This type of unemployment arises from normal labor turnover. ((2)) An unemployed textile worker in South Carolina who loses her job because of competition from China is an example of structural unemployment. This type of unemployment arises when changes in technology or international competition change the skills needed to perform jobs. ((3)) An autoworker who loses his job in a recession is an example of cyclical unemployment. This type of unemployment arises in recessions. ((4)) An autoworker who loses his job because of a slowdown in the economy is an example of frictional unemployment. This type of unemployment arises in recessions.

Statements 1, 2, & 3 are true. Statement 4 is false.

In today's economy, the percentage of the employed people who have part-time jobs increases in _______ because _______.

a recession; firms cut work hours

"Despite some optimism about the seeds of recovery, the Congressional Budget Office (CBO) sees joblessness rising. The CBO sees unemployment peaking at 10.4% next year from an average of 9.3% this year, before it falls to 9.1% in 2011." Source: Fortune, August 25, 2009 Before the recession began, the U.S. unemployment rate was about 6 percent. As a recession begins, firms quickly make layoffs. Is this rise in unemployment mostly a rise in frictional, structural, or cyclical unemployment? The resulting rise in unemployment is mostly a rise in ______ unemployment because _______.

cyclical; it is related to the state of the economy

"The U.S. Postal Service plans to reduce its workforce by 220,000 jobs to remedy its dire financial situation. The Postal Service, financed mostly by postage, has been struggling as a result of the economic slowdown." Source: The Wall Street Journal, August 12, 2011 The cut in employment at the U.S. Postal Service results in ______ unemployment because _______.

cyclical; the workforce is being decreased because of the economic slowdown

The unemployment rate in European countries tends to be higher than the one in the US because __

it is more difficult to be considered "unemployed" in the US than in Europe.

"The U.S. Department of Labor reported that Michigan's unemployment rate in June 2009 rose to 15.2%, becoming the first state in 25 years to suffer an unemployment rate exceeding 15%. Michigan has been battered by the collapse of the auto industry and the housing crisis and has had the highest unemployment rate in the nation for the past 12 months." Source: CNNMoney, July 17, 2009 Is this increased unemployment frictional, structural, or cyclical? Explain. The increased unemployment rate in Michigan is _____.

structural that arises due to changes in international competition, and cyclical due to a downturn in the U.S. economy

"Bank of America officials have discussed eliminating about 40,000 positions during the first wave of..., as it closes branches in response to the growth of online banking. Source: The Wall Street Journal, September 9, 2011 The cut in employment at Bank of America results in ______ unemployment because _______.

structural; the labor restructuring is in response to changing technology

The unemployment rate tends to actually underestimate the unemployment problem, especially during a recession because ______.

the number of marginally attached workers increases, but these workers are not included in the official unemployment rate

We are at "full employment" when ____________.

when cyclical unemployment is zero