Macro

Labor force

# of people employed + # of people unemployed

Employment to population ratio

# of people employed/working age population x100

Unemployment rate

# of people unemployed/labor force x100

Discouraged workers-15 million Unemployed workers-40 million Employed workers-100 million Working age population-225 million calculate the unemployment rate

13.3 percent

Discouraged workers-15 million Unemployed workers-40 million Employed workers-100 million Working age population-225 million The size of the labor force is?

140 million

Total population-2600 Working age population-2000 Not in labor force-500 Employed-1300 Calculate the number of people in the labor force

1500

Total population-80 Million Currently unemployed-40 million Not working and looking for work-2 Million Want to work but no longer looking for work-4 Million The number of people officially unemployed is________

2 Million

Discouraged workers-15 million Unemployed workers-40 million Employed workers-100 million Working age population-225 million the working age population is?

225 million

Discouraged workers-15 million Unemployed workers-40 million Employed workers-100 million Working age population-225 million The unemployment rate is?

29 percent

Suppose the economy is experiencing frictional unemployment of 1 percent, structural unemployment of 3 percent and cyclical unemployment of 4 percent. What is the natural rate of unemployment?

4 percent

Total population-80 Million Currently unemployed-40 million Not working and looking for work-2 Million Want to work but no longer looking for work-4 Million The size of the labor force is___________

42 Million

Discouraged workers-15 million Unemployed workers-40 million Employed workers-100 million Working age population-225 million the employment rate to population ratio is?

44 percent

Total population-80 Million Currently unemployed-40 million Not working and looking for work-2 Million Want to work but no longer looking for work-4 Million The unemployment rate is _____________

5 Percent

Discouraged workers-15 million Unemployed workers-40 million Employed workers-100 million Working age population-225 million the labor force participation rate is?

62 percent

Discouraged workers-15 million Unemployed workers-40 million Employed workers-100 million Working age population-225 million Calculate the employment to population ratio

65 percent

The natural rate of employment is Not a fixed percentage of the labor force occurs when only there is no cyclical unemployment present the unemployment rate when the economy is at potential GDP

All of the above

Suppose the country of Tiny Town experienced frictional unemployment. This frictional unemployment would?

Be considered a natural occurrence in a growing company

Which type of unemployment increases during a recession?

Cyclical unemployment

Which of the following will decrease the unemployment rate? Hint: 5/100 is bigger than 4/99

Discouraged workers leave the work force

Suppose the economy is experiencing a recessionary gap. In the long run, the money wager rate ________ unemployment _____ and the price level

Falls : falls : falls

When a worker quits a job for a better job

Frictional unemployment increases

Suppose the natural rate of unemployment equals 6 percent and the current unemployment rate is 8 percent. We can conclude that..

Full employment is not occurring

Who of the following is unemployed? Rene a retired chemist Homer a full time student at a vocational school Kim a worker on strike from her company for a week Glenn a student who just graduated from college last week and is currently looking for a job

Glenn a student who just graduated from college last week and is currently looking for a job

Suppose the economy was initially in a long-run equilibrium Then the world economy expands so that foreign income rise US aggregate demand ________ and eventually the money wage rate ________

Increases : rises

A decrease in the money wage rate

Increases the short-run aggregate supply

An increase in the quantity of capital shifts the _______ curve _______ and the________ curve _________

LAS: rightward: SAS : rightward

Labor force participation rate

Labor force/working-age population x100

Frictional unemployment is the result of ?

Normal labor market turnover

Someone who is officially unemployed is

Not currently working but actively searching for a job

A technological advance _____ the long-run aggregate supply curve and ________ the short run-aggregate supply curve

SHifts:Shifts

A change in capitol stock ______ the short-run aggregate supply curve and ______ the long-run aggregate supply curve

Shifts:Shifts

A change in the full-employment quantity of labor ________ the short-run aggregate supply curve and ________ the long-run aggregate supply curve.

Shifts:Shifts

Suppose the number of people employed is 25 million and the number of people in the labor force is 75 million What is the employment-to-population ratio?

There is not enough information given to answer the question

Full employment occurs when the ?

Unemployment rate equals the natural rate of employment

If the number of people unemployed and the number of people in the labor force grow at the same rate then the____________________

Unemployment rate will stay the same

What will happen if AD increases by less than expected?

We will be in a recession

Full employment occurs when?

cyclical unemployment is zero

Last year in the country of Union, the price level increased and real GDP increased. Such an outcome might have occurred because short-run aggregate supply_______ and aggregate demand ________

did not change : increased

When the price level rises, the long-run aggregate supply curve

does not shift

Economic growth will occur and the price level will be constant when the increase in aggregate demand

exactly equals the increase in long-run aggregate supply

Suppose that wage contracts between workers and employers are based on an expected inflation rate of 3 percent and a 5 percent increase in money wages is agreed upon. If inflation actually equals 7 percent, real wages

fall

When inflation is less than anticipated inflation _________

lenders gain at the expense of borrowers

As far as redistribution is concerned, if the inflation rate is lower than anticipated,

lenders gain at the expense of borrowers and some workers gain at the expense of employers

When the economy moves into and out of recessions and expansions, the unemployment rate fluctuates around the

natural rate of unemployment

If workers and employers base their wages on an inflation forecast that turns out to be correct

neither workers nor employers gain or lose from the inflation

Full employment occurs

only if the unemployment rate is equal to the natural rate of unemployment.

In short-run macroeconomics equilibrium

real GDP and the price level are determined by short-run aggregate supply and aggregate demand

When the unemployment rate is below the natural rate of unemployment

real GDP is greater than potential GDP

If the AD curve shifts rightward more than expected

real GDP will be greater than potential GDP

If the aggregate demand curve shifts rightward less than expected

real GDP will be less than potential GDP

In a short-run macroeconomics equilibrium, real GDP exceeds potential GDP, so the

short-run aggregate supply curve will shift leftward as the money wage rate rises

Structural unemployment is the result of?

technological change or foreign competition

A change in the money wage rate shifts

the SAS curve but not the LAS curve

When cyclical unemployment increases and other things remain the​ same, ______.

the natural rate of unemployment does not change

People know that the inflation rate will increase from 3 percent 5 percent. As a result

the nominal interest rate rises by 2 percentage points

If the AD curve shifts rightward less than expected

the price level is lower than expected and output is below potential GDP

Which labor market statistic tends rise during recessions and fall during expansions?

the unemployment rate

Frictional unemployment

the unemployment which exists in any economy due to people being in the process of moving from one job to another.

If the money wage and other resource prices do not change when the price level rises by 10 percent

there is movement along the short-run aggregate supply curve

structural unemployment

unemployment resulting from industrial reorganization, typically due to technological change, rather than fluctuations in supply or demand.

Inflation that is higher than expected transfers resources from

workers to employers and lenders to borrowers