Macro Homework 4 - Unemployment

Suppose the natural rate of unemployment is 5 percent, there is 2.5 percent frictional unemployment, and the actual rate of unemployment is 7 percent. Then:

structural unemployment is 2.5 percent and cyclical unemployment is 2 percent.

A welder that has been laid off because a robot has made her services obsolete is considered to be:

structurally unemployed.

Use the data in the table below to answer the question: The unemployment rate in Year 2 is approximately:

4.3 percent.

Use the data in the table below to answer the question: The number of unemployed workers in Year 2 is:

6 million

Are you employed, unemployed or not in the labor force? Explain why you think you should be classified this way. Does your situation contribute to an increase, a decrease or not impact the unemployment rate. Explain.

I am of legal working age and am working part-time therefore I belong to the employed sector of the labor force. As such, I contribute to a decrease in the unemployment rate because I am adding to the labor force but not the unemployed sector.

The measurement error caused by the existence of discouraged workers:

NOT is never significant.

Which of the following statements is true?

When the economy is experiencing cyclical unemployment, the number of job-seekers exceeds the number of jobs available.

The phantom unemployed:

claim they are actively seeking work when in fact they are not.

Macroeconomic policy is primarily aimed at eliminating:

cyclical unemployment.

Use the data in the table below to answer the question: The unemployment rate __________ between Year 1 and Year 2 and __________ between Year 2 and Year 3.

decreased; decreased

Officially, individuals who are not currently working are classified as unemployed if:

they are willing and able to work and are actively seeking employment.