Econ HW 2

Even if they don't find a job right away, people entering the job market after graduating from high school or college will

Be counted as part of the labor force by the BLS if they are actively looking for work.

As detailed in the opening section of Chapter 9, Unemployment and Inflation, Stoughton Trailers in the spring of 2019 was struggling to find workers. To fill it's infilled positions Stoughton Trailers hired

Current prison inmates- through a work release program- and recently released formers inmates.

When an unemployed person drops out of the labor force, it

Does not affect the employment-population ratio.

Government unemployment insurance tends to

Increase the unemployment rate by lowering the opportunity cost of job search.

The natural rate of unemployment is

The sum of structural unemployment and frictional unemployment.

Suppose the working-age population of a fictional economy falls into the following categories: 90 are retired or homemakers; 60 have full-time employment; 20 have part-time employment; 20 do not have employment, but are actively looking for employment; and 10 would like employment but do not have employment and are not actively looking for employment. The official unemployment rate as calculated by the US Bureau of Labor would equal

(20/100) × 100.

From February 2020 to April 2020 non farm payroll jobs drop by

22 million.

As detailed in the opening section of Chapter 9, Unemployment and Inflation, Mary Daly, president of the Federal Reserve Bank of San Francisco, and colleagues found that during periods when the unemployment rate is unusually low

Non-whites and white women with less than a college degree are disproportionately likely to benefit.

Suppose an economy is given by the following: Population= 256 million Labor force= 157 million The number of people employed= 149.2 million The number of people unemployed= 7.8 million Given the information above, the unemployment rate is _____%.

5

The unemployment rate in February 2020 (before the coronavirus in the US) of 3.5% was the lowest in over

50 years.

Suppose an economy is given by: Population= 208 million Working-age population= 120 million Labor force= 82 million The number of people employed= 75 million The number of people unemployed= 7 million The labor force participation rate for this economy is ________%.

68.3

Suppose that the economy enters into a recession and that, as a result, Rusty Z. Wrench loses his job as a delivery truck mechanic and remains unemployed. When the economy recovers, Rusty's previous employer rehires him. What is the best classification for his time as an unemployed truck mechanic?

Cyclically unemployed

The millions of workers leaving the job market for the reasons given are

Not counted as unemployed in the BLS data because they are no longer actively looking for work.

Discouraged workers are classified by the BLS as

Not in the labor force.

The employment-population ratio measures the

Percentage of the working age population that is employed.

The payment of government unemployment insurance reduces the severity of recessions by

Preventing a huge drop in income and spending for the unemployed.

The unemployment rate

Shows the percentage of the labor force that is considered unemployed.

Bob Wesley believes that structural unemployment should be eliminated in order for an economy to be healthy. In making this argument, which of the following relevant issues is he ignoring?

Structural unemployment will exist in an economy that is innovative.

Are these applicants likely to be cyclically, fractionally, or structurally unemployed, and what would be the reason that most of them are unemployed? Briefly explain.

Structurally unemployed, because these applicants lack the skills required for the available jobs.

Many economists prefer

The establishment survey because it is determined by actual payroll records rather than unverified answers.

Which one of the following depicts an accurate description of the household survey and the establishment survey?

The household survey interviews households and collects data that is used to measure the unemployment rate whereas the establishment survey interviews businesses and measures total employment in the economy.

_________________ is the percentage of the working-age population in the labor force.

The labor force participation rate

When the economy is at full employment, unemployment is equal to

The natural rate of unemployment.

When an unemployed person drops out of the labor force, the unemployment rate

Understates the true degree of joblessness in the economy.