Econ Chapter 20

A country has a noninstitutionalized population of 243 million people. Of that number, - 38 million are under the age of 16 - 70 million are full-time students and retirees - 8 million are unemployed workers - 31 million are employed part-time for economic reasons - 96 million are employed full-time What is the labor force participation rate? Round to the nearest whole percentage.

66%

Click on the U.S. unemployment rate range in which the natural unemployment rate is located.

5%

Which statement is not true of full-employment output (Y*)?

It is the economic output when unemployment is at zero.

Place the following groups in order of U.S labor force participation rates as of January 2019, from highest to lowest.

white male teenagers white female teenagers black female teenagers black male teenagers

In January 2019, - labor force participation in the United States was 62.3%. official unemployment was 4.1%. - the proportion of short-term unemployment (14 weeks or less) in that month on average was 68.9%. - moderately long-term unemployment (15-26 weeks) was 12.7%. - very long-term unemployment (27 weeks or longer) was 18.4%. Based on these statistics, what proportion of the labor force was unemployed very long term in January 2019, to the nearest tenth of a percent? Note: Make sure to round your answer to the nearest tenth of a percent.

0.8%

Which of the following groups would not be counted as unemployed when calculating the unemployment rate?

Not included: retired workers, recently laid-off workers who are not searching for jobs, a --year-old student searching for his first job, employed workers who want to work more hours Included: recently laid-off workers who are searching for new jobs

Match the following statements to the results these actions have had on the labor market participation rate of men or women.

increases women's labor force participation rate: reduction in social barriers to women working, increase in proportion of workforce for traditional female-dominated jobs in education and health care, increase in availability of preschools, invention of labor-saving devices, such as vacuum cleaners and dishwashers decreases women's labor force participation rate: women staying in school longer, increase in women caring for aging parents decreases men's labor force participation rate: men staying in school longer, men living longer, men increasingly likely to stay home to care for children, reduction in proportion of workforce for traditionally male-dominated manufacturing jobs

Not all unemployment is (1) destruction. Sometimes unemployment is due to (2) destruction, which is the introduction of new (3) destruction and technologies that leads to the shutdown of other industries and jobs, as some jobs become (4) destruction, causing structural unemployment.

1 Unhealthy 2 Creative destruction 3 Products 4 Obsolete

Match the level of unemployment with the condition of the overall economy.

Actual GDP is equal to potential GDP. (Unemployment equals the natural rate.) & (Cyclical unemployment equals zero.) Actual GDP is below potential GDP. (Unemployment is above the natural rate.) Actual GDP is above potential GDP. (Unemployment is below the natural rate.)

Match each scenario to the label that best represents the person's employment situation. Labels may be used more than once.

Carla is a retired librarian who works part-time at a local bookstore. (employed) Elisha has moved to California and is taking classes while trying to find a job. (unemployed) Olivia can't find a job in her college major, so she's no longer looking for work. (not in the labor force) Keith is a captain in the U.S. Army. (not in the labor force) Darnell has a part-time job at the post office while looking for a full-time position as an accountant. (underemployed)

The labels below describe either cyclical, structural, or frictional unemployment. Drag each label to the correct area on the figure. Keep in mind that not all labels will be used.

Cyclical: an unemployment level that is lower than the natural rate under healthy economic conditions unemployment that occurs as a result of a recession Structural: unemployment that occurs as a result of changes in the industrial makeup of the economy unemployment as a result of seeking a new job in a shrinking industry Frictional: unemployment between time of graduation and finding a first job in a stable industry unemployment as a result of seeking a new job in a stable industry

Based on this information, select whether the following suggested measures would reduce or increase Spanish youth unemployment.

Reduce(s) Youth Unemployment: - encourage students to stay in the education system longer - make it easier for companies to break fixed-term contracts to lay off workers - offer a government subsidy for companies that hire long-term unemployed youth - lower the age at which students can enter dedicated skills-training programs Increase(s) Youth Unemployment: - enable youth to leave high school at a younger age - increase the number of jobs that are covered by fixed-term contracts - increase Social Security contributions by companies

Government policies are sometimes created to help reduce different types of unemployment. Drag each government program to the appropriate type of unemployment the program would reduce.

Structural Unemployment: - offering job training and educational programs - providing subsidies to encourage people to relocate Frictional Unemployment: - decreasing the amount of paperwork employers must complete for newly hired workers - increasing the amount of severance pay employers must pay when they fire someone

The broader measure of labor market problems, U-6, includes marginally attached and underemployed workers. The standard official unemployment rate is U-3. Determine whether the following scenarios affect only U-6 or both U-3 and U-6.

both U-3 and U-6: - When Bill was released from prison, he looked for work for a year, but no one would give him a chance. - Phil is looking for work as a machinist; a prospective employer told him he'd have a job for him in three months, so Phil hasn't been looking for work for the last month Only U-6: - Stalina is working part-time as a waitress, while her husband Vitaly works in construction when jobs are available. Stalina gets pregnant and needs a full-time job with medical insurance. - John quits his job as a government worker and becomes an adjunct (part-time) professor. He would like to eventually become a full-time professor. - After graduating college and working as a teaching assistant, Priyanka gets a part-time job as a programmer and also works as a personal trainer and an Uber driver to make ends meet.

The (1) unemployment rate while economy X is (2) is 0%. The 5% normal unemployment rate is due to structural and (3) factors.

1 cyclical 2 growing normally 3 frictional

Which of the following scenarios are examples of job separation (i.e., workers who quit or were laid off) as a result of creative destruction?

Examples: - Indeed.com provides an Internet-based job service; as a result, newspaper job offerings shrink and newspapers lay off workers. - A company installs a new accounting system that does all the billing automatically, which subsequently shuts down the accounting department. - In 1800, over 90% of U.S. workers had jobs in agriculture; by 2017, less than 5% did. - The book retailer Borders laid off 19,000 employees when it went bankrupt in 2011. Not an example: - McDonalds starts selling a popular new product, the "Quadstack," which causes Burger King to lose customers. Burger King then lays off workers. - A regulation is passed that mandates paying workers for 45 days of labor for every year they are with a firm if they are fired or laid off. The day before the legislation goes into effect, three million workers with more than ten years of tenure each are fired. - In 2001, there was an economic downturn as a result of a reduction in the valuation of many tech stocks. As a result, companies laid off 1.7 million people.

Match the job sectors to their workforce shares from 1800 to 2010.

bottom:agriculture middle:industry top: services

Put the following hypothetical events, illustrating frictional unemployment, in chronological order.

1 Burger chain A introduces a new product, the MegaBurger 2 Customer demand for burger chain A's new burger is high 3 Burger chain A hires more workers as a result of increased demand for its products. At the same time, burger chain B begins to lose market share to burger chain A 4 Burger chain B lays off some of its workers 5 Unemployed burger chain workers are hired by burger chain A

Marshall has recently lost his job and is currently receiving federal jobless benefits. Fill in the blanks to complete the following passage about Marshall. Marshall benefits by receiving income so that he can continue to (1) goods and services while searching for a new job, which benefits society because it decreases the likelihood of an economic (2) On the other hand, the benefits may also cause Marshall to become (3) to take a job and (4) the amount of time he spends unemployed.

1 Consume 2 Recession 3 Less 4 Increase

Njal had been working as a chainsaw operator for the past 15 years when his company decided to upgrade its equipment from chainsaws to timber harvesters, which are large pieces of equipment that require a new set of skills. The company was unwilling to train existing workers on the new equipment, so Njal needed to find another source of income. Match the scenarios Njal goes through on his way from one job to the next with the relevant economic terms.

After completing the training program, Njal looks for work as a computer-repair specialist, but no one will hire him since he is an older worker and has no experience. (Frictional unemployment) Njal takes a part-time job with a computer-repair service to gain experience until he can find a full-time job. (employed part-time for economic reasons (counted as part of U-6 unemployment)&(part of the labor force) When Njal's company upgrades its operations, it will no longer employ chainsaw operators like Njal. Njal is not trained to do what the company needs, so he is laid off. (structural unemployment) After looking for work for several months, Njal cannot find work for a chainsaw operator, so he stops looking for three months.(not in the labor force) Njal signs up for a six-month government program that will train him to be a computer-repair specialist. (not in the labor force) Njal starts his own computer-repair company, and eventually has enough work to hire an assistant.(part of the labor force)

Match each form of unemployment with an example. Note that every item may not have a match.

An unemployed banker seeking a job during a recession. The banker would be hired back once the economy began growing normally again. (Cyclical unemployment) An unemployed paper mill worker currently looking for work. The local paper mill shut down due to lack of demand for paper products in a digital age.(Structural unemployment) An unemployed cashier looking for employment. A small clothing store shut down due to its customers buying clothes from a new big-box retailer.(Frictional unemployment)