MyEconLab HW#2

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Population​ = 295295 million Labor force​ = 162162 million The number of people employed​ = 147.4147.4 million The number of people unemployed​ = 14.614.6 million What is the unemployment rate?

14.6/162 * 100 = 9%

When the economy was expanding in early​ 2007, fewer than​ _______ percent of the unemployed had been jobless for more than 6 months.

20%

Population​ = 235235 million ​Working-age population​ = 128128 million Labor force​ = 9494 million The number of people employed​ = 8888 million The number of people unemployed​ = 66 million The labor force participation rate for this economy is?

94/128 * 100 = 73.4%

The​ working-age population in Concordia was estimated to be 6.5 million in a certain year. The​ country's labor department announced that the total number of unemployed people in the country had gone up to​ 460,000 during this year​ while, the total number of people out of the labor force decreased to​ 2,000,000. Oscar​ Lewis, a student of labor economics believes that the labor department data is flawed. Which of the​ following, if​ true, would strengthen the argument that the data understates​ unemployment? A. Five percent of the​ country's labor force consists of legal immigrants with work permits. B. Skilled workers who were forced to shift to​ part-time jobs because of an economic downturn are also considered employed. C. The labor bureau in Concordia does not consider​ full-time students or retirees as people in the labor force. D. Businesses in the country often complain about labor​ shortage, whether skilled or unskilled. E. The country has high income​ taxes, but an inefficient tax payment monitoring system.

B. Skilled workers who were forced to shift to​ part-time jobs because of an economic downturn are also considered employed.

The price index which is used to measure changes in the cost of living is the

Consumer Price Index​ (CPI).

the government has been unable to bring down the unemployment rate in the country. Which of the​ following, if​ true, best explains this​ outcome? The number of students who enroll for higher education is decreasing every year. B. The per capita income of the people in Concordia has been increasing over the years. C. Most educated people prefer job options in Concordia compared to opportunities available elsewhere. D. The government implemented a generous welfare plan 3 years ago to support people who cannot find work. E. During this​ period, the​ country's government reduced the limits on foreign direct investment in key sectors.

D. The government implemented a generous welfare plan 3 years ago to support people who cannot find work.

Briefly explain whether you agree or disagree with the following​ statement: ​"I don't believe the government price statistics. The CPI LOADING... for 2014 was 215215​, but I know that the inflation rate LOADING... ​couldn't have been as high as 115115 percent in​ 2014."

Disagree. The inflation rate is the percentage increase in the price level from the previous​ year, not the base year.

Which one of the following is not a measure of the price​ level?

Government Price​ Index: an average of the prices paid by the government for goods and services used only by different government agencies.

Which of the​ following, if​ true, would strengthen the argument for increasing minimum​ wages?

Increases in the minimum wage are observed to reduce employee turnover.

Why is the unemployment​ rate, as measured by the Bureau of Labor​ Statistics, an imperfect measure of the extent of joblessness in the​ economy?

It does not account for inaccurate responses to the Current Population Survey. Underemployed people are considered employed. Discouraged workers are not considered unemployed. It fails to account for illegal activities.

The BLS uses the establishment survey to collect information on employment in the economy. Indicate one drawback of the establishment survey compared to the current population survey and indicate one advantage.

It is based on company payroll and not on unverifiable answers. It does not include information about​ self-employed people.

Which of the following best describes a current trend in the labor force participation rate in terms of percent of men and women

It is decreasing for men and increasing for women.

What does the employment population ratio measure?

Measures the percentage of the working age population that is employed

During an economic​ expansion, we would normally expect the​ employment-population ratio to increase as the unemployment rate falls because

More people are likely to be employed

How do you calculate the unemployment rate?

Number of unemployed/Labor Force *100

Which one of the following accurately describes the relationship between frictional unemployment and job​ search?

People are said to be frictionally unemployed when they are between jobs and searching for new jobs.

What are some problems in measuring the unemployment rate?

People on active military service are included as unemployed

How is the labor force participation rate calculated?

Percent of people in the Labor Force/Working-age population * 100

What effect do labor unions have on the unemployment​ rate?

Since few​ non-government workers are​ unionized, there is no significant effect on the unemployment rate.

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.

What is the difference between the consumer price index and the producer price​ index?

The consumer price index is an average of the prices of the goods and services purchased by the typical urban family of​ four, whereas the producer price index is an average of the prices received by producers of goods and services at all stages of the production process.

When employment​ rises, the labor force participation rate and the​ employment-population ratio will both increase because

The denominators (working age pop) are the same and employment is included in both of the numerators.

Relative to the household​ survey, which of the following is a strength of the establishment​ survey?

The establishment survey is determined by actual​ payrolls, rather than by the unverified answers of the household survey.

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

The labor force participation rate

What would happen to the unemployment rate and the Labor Force Participation rate if homemakers were included in these numbers?

The unemployment rate would decrease and the labor force participation rate would increase

How would it affect the unemployment rate if the Bureau of Labor Statistics counted as unemployed both​ (1) discouraged workers and​ (2) people who work​ part-time but would prefer to work​ full-time?

The unemployment rate would increase.

Does the unemployment rate understate or overstate the true degree of joblessness when an unemployed person drops out of the labor force?

Understates because the number of people in the labor force will decrease will the number of employed will stay the same

Is it possible for the employment to population ratio to increase while the labor force participation rate stays the same?

Yes

Suppose that you are available to go to work but have not looked for a job for at least the last four weeks because you believe that there​ aren't any jobs available. You would be counted as

a discouraged worker.

How does the U.S. economy create and destroy millions of jobs each​ year? ​(Mark all that​ apply.) a) In the market​ system, new firms are constantly entering and exiting various industries. b) When unemployment is​ high, the federal government hires more workers to offset the effects of unemployment. c) Some businesses are​ expanding, while others are contracting. d) The federal government determines that certain industries are obsolete and closes firms.

a) In the market​ system, new firms are constantly entering and exiting various industries. c) Some businesses are​ expanding, while others are contracting.

When an unemployed person drops out of the labor force, it a) does not affect the employment-population ratio b) does not affect the unemployment rate c) does not affect the labor force participation rate d) affects the employment-population ratio

a) does not affect the employment-population ratio

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 or not be counted as part of the labor force and why?

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

The increase in labor turnover and the increases in​ entry-level wages being paid by large retailers are

connected because higher wages can encourage workers to stay​ longer, thereby lowering turnover rates.

Which of the following is not one of the conditions someone needs to meet to be counted as unemployed? a) They were available for work in the week previous to the survey b) The must not have worked in the week previous to the survey c) They had actively looked for work at some time during the previous four weeks d) They had worked only one hour per week during the previous four weeks

d) They had worked only one hour per week during the previous four weeks

As output​ (GDP) is​ increasing, the amount of cyclical unemployment would

decrease

If the​ employment-to-population ratio increased while the labor force participation remained largely​ unchanged, it is because any increase in

employment would have been offset by a fall in unemployment.

What is the formula for employment-population ratio

employment/working-age population * 100

Most economists agree that the​ above-market wage paid in unionized industries significantly increases the unemployment rate in the United States.

false

A person who is in between jobs but actively engaged in a job search is considered to be ____ Experts in​ hand-drawn animation who remain unemployed due to the film​ industry's switch to​ computer-generated animation are considered to be ____ When a company reduces production and employment during economic​ recessions, those employees who lose their jobs are generally considered to be ____ Unemployment caused by an increase in job quits would be classified as

frictional structural cyclical frictional

Consider the effect of each of the following on the unemployment​ rate: a. The minimum wage law b. The effect of labor unions on overall unemployment is ____ since only a ____ percentage of the labor force outside the government is unionized. c. An efficiency wage

has only a small effect on the unemployment rate since only a small part of the labor force earns the minimum wage. small small increases the unemployment rate since firms pay a​ higher-than-market wage that increases the quantity of labor supplied.

labor turnover

labor turnover is a separation of an employee from an establishment. Separations may be voluntary​ (quits), involuntary​ (layoffs, discharges), or other​ (retirements, death,​ disability).

Workers leave the job market because of​ retirement, to care for children or aging​ parents, to pursue more​ education, or out of discouragement. Millions of others jump in after​ graduating. Are they counted or not counted as unemployed? And why?

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

When compared to the Great​ Depression, the typical length of unemployment in the modern​ (post-Great Depression-era) U.S. economy is

relatively brief

The unemployment rate

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

Given a table with products, quantity, and price per year, calculate the annual rate of inflation for 2016 as measured by the CPI 3 Products quantities are: 1,9,2 99 price: 10,2,15 '15 price: 11,2.45,15 '16 price: 16.20,2.40,14

spending 1999: 10+18+30 = 58 spending 2015: 11+9*2.45+30 = 63.05 spending 2016: 16.20+9*2.40+28 = 65.8 CPI 2015: (63.05/58) * 100 = 108.706 CPI 2016: (65.8/63.05) * 100 = 104.362 ((108.706-104.362)/108.706)*100 = -3.9964 ——> 4%

The type of unemployment most likely to result in hardship for the people who are unemployed is

structural because this type of unemployment requires retraining to acquire new job skills.

Unemployment arising from a persistent mismatch between the skills and characteristics of workers and the requirements of jobs is called

structural unemployment.

Creating a goal of zero percent unemployment for an economy is not feasible nor is it desirable because

the economy needs some​ short-term unemployment in order to allow for better matching of jobs with workers that possess the proper skill sets.

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

the natural rate of unemployment.

A​ state's unemployment rate could have increased at the same time that employment in the state was increasing because

the number of discouraged workers and other people not previously counted as unemploymed enter the labor force. While searching for jobs these people are classified as unemployed.

The unemployment rate in the United States typically has been lower than the unemployment rates in Canada and countries in Western Europe because

the opportunity cost of job search is lower in Canada and countries of Western Europe and unemployed workers in those countries search longer for jobs.

During the recovery from the​ 2007-2009 recession, the​ employment-population ratio did not increase as much as it might have been expected to because

the recovery was sluggish and employment did not expand as rapidly.

The natural rate of unemployment is

the sum of structural unemployment and frictional unemployment.

Working-age pop = 245.9 million labor force​ = 155.5 million not in the labor force​ = 90.4 million employed​ (144.2 million) unemployed​ (11.3 million) not available for work​ (84.1 million) available for work​ (6.3 million) discouraged workers​ (0.9 million) not working other reasons (5.4 million). What's the unemployment rate and the labor force participation rate?

the unemployment rate is 11.3/155.5 *100 = 7.3% the labor force participation rate is 155.5/245.9 *100 = 63.2%

When the economy is at full​ employment

the unemployment rate is greater than zero. all remaining unemployment is either frictional or structural. the natural rate of unemployment prevails.

When there are part-time workers, the official BLS measures of the unemployment rate _____ the true degree of unemployment

understates

correct formula for calculating the unemployment​ rate?

unemployed/LF * 100

Eliminating all frictional unemployment will

will not be good for the economy since the presence of frictional unemployment increases economic efficiency.

The four types of unemployment are

​frictional, seasonal, structural, and cyclical


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