Consider a hypothetical economy in which the labor force consists of 100 people. Of those, 90 people are employed full-time and 10 people areunemployed. The economy follows the same conventions as the U.S. Bureau of Labor Statistics (BLS) in computing its employment figures. Therefore,initially the unemployment rate is calculated as follows:Unemployment Rate -Number of Unemployed PeopleNumber of People in the Laber Far 10010X10010%Suppose a reduction in foreign demand for this economy's products causes an economic recession-a prolonged period of declining output. Thefollowing table offers two possible scenarios resulting from the recession.Calculate the unemployment rate associated with each scenario in the following table. Assume that each scenario describes the only labor marketchanges in this economy.ScenarioA: Firms reduce work hours by 30%. The number of involuntary part-time workers risesas firms respond to the reduction in the demand for their products by reducing the hoursof each employed person from 40 to 28 hours per week.Unemployment RateB: Firms reduce employment by 30%. The number of unemployed workers rises as firmsrespond to the reduction in the demand for their products by laying off 27 previouslyemployed workers.Tom of faire The unemployment rate for scenario A in the previous table understates the true extent of underemployment in the economy because AttemptsLo No Harm/0.53. Discouraged workers and involuntary part-time workersSimply counting the number of unemployed workers will not necessarily give the Bureau of Labor Statistics (BLS) the most accurate indication of theextent of underemployment in the economy. Some part-time workers will be counted as employed even if they'd like to work full-time. Furthermore,some jobless workers will not qualify as unemployed because they have given up on their job search, frustrated with their inability to find work.Fortunately, the BLS can use the information provided in the household survey to classify workers in ways that account for these types ofunderemployment.The BLS classifies those who work part-time because they cannot find full-time employment as involuntary part-time workers. The BLS classifiesas discouraged workers those who want and are available for work but have not searched for employment during the previous four weeks becausethey believe their job search is currently futile. By keeping track of discouraged and involuntary part-time workers, the BLS gets a clearer picture ofunderemployment than if it looked only at the number of unemployed workers.Which of the following statements correctly describe discouraged workers? Check all that apply.They have not looked for work during the past four weeks.They would like to have a job.D They are employed workers who want to earn higher wages.They are full-time workers who would like to work only part-time.Consider a hypothetical economy in which the labor force consists of 100 people. Of those, 90 people are employed full-time and 10 people areunemployed. The economy follows the same conventions as the U.S. Bureau of Labor Statistics (BLS) in computing its employment figures. Therefore,initially the unemployment rate is calculated as follows:Newberat themed Books

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Consider a hypothetical economy in which the labor force consists of 100 people. Of those, 90 people are employed full-time and 10 people are unemployed. The economy follows the same conventions as the U.S. Bureau of Labor Statistics (BLS) in computing its employment figures. Therefore, initially the unemployment rate is calculated as follows: Unngled Unemployment Rate Number of the Laber F100 10 x 100 100 10% Suppose a reduction in foreign demand for this economy's products causes an economic recession-a prolonged period of declining output. The following table offers two possible scenarios resulting from the recession. Calculate the unemployment rate associated with each scenario in the following table. Assume that each scenario describes the only labor market changes in this economy. Scenario A: Firms reduce work hours by 30%. The number of involuntary part-time workers rises as firms respond to the reduction in the demand for their products by reducing the hours of each employed person from 40 to 28 hours per week. B: Firms reduce employment by 30%. The number of unemployed workers rises as firms Unemployment Rate

Consider a hypothetical economy in which the labor force consists of 100 people. Of those, 90 people are employed full-time and 10 people are unemployed. The economy follows the same conventions as the U.S. Bureau of Labor Statistics (BLS) in computing its employment figures. Therefore, initially the unemployment rate is calculated as follows: Unngled Unemployment Rate Number of the Laber F100 10 x 100 100 10% Suppose a reduction in foreign demand for this economy's products causes an economic recession-a prolonged period of declining output. The following table offers two possible scenarios resulting from the recession. Calculate the unemployment rate associated with each scenario in the following table. Assume that each scenario describes the only labor market changes in this economy. Scenario A: Firms reduce work hours by 30%. The number of involuntary part-time workers rises as firms respond to the reduction in the demand for their products by reducing the hours of each employed person from 40 to 28 hours per week. B: Firms reduce employment by 30%. The number of unemployed workers rises as firms Unemployment Rate

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Assume the following for the town of Boone: The town has a total population of 60,000 people, of which 2,000 are under 16 years of age or are institutionalized; 4,000 are full-time students who are not employed and are not seeking work; and 50,000 are employed. The rest of the people are out of work but have been actively seeking work within the past four weeks. What is the unemployment rate in Boone? Instructions: Round your answer to 1 decimal place. percent
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