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