Consider a hypothetical economy in which the labor force consists of 200 people. Of those, 180 people are employed full-time and 20 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 RateNumber of Unemployed PeopleNumber of People in the Labor Forceх 10020х 100200= 10%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.ScenarioUnemployment RateA: Firms reduce work hours by 10%. The number of involuntary part-time workers rises%as firms respond to the reduction in the demand for their products by reducing the hoursof each employed person from 40 to 36 hours per week.B: Firms reduce employment by 10%. The number of unemployed workers rises as firmsrespond to the reduction in the demand for their products by laying off 18 previouslyemployed workers.True or False: The unemployment rate for scenario A in the previous table overstates the true extent of underemployment in the economy because theBLS counts part-time workers as employed.O TrueFalseI|||

Total Labor Force consists of both Employed and Unemployed Workers. Unemployment Rate = Total…

Answered: Consider a hypothetical economy in…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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In a macroeconomy where textile and information technology are among the major industries, the natural rate of unemployment is 5%. Although workers prefer full-time jobs, all industries have a combination of full-time and part- time (underemployed) workers. In 2010, the total population was 10 million with an adult population of 7.8 million, and real output for the year was $270 billion. In the same year, 4.5 million people were employed, 1.5 million people were part-time workers, and 300,000 people were unemployed. Furthermore 400,000 individuals stated that they were discouraged from searching for a job. (Question 1 of 7) What was the real GDP per capita in 2010? (report your answer up to 2 decimal places)
M12
Include correctly labeled diagrams, if useful or required, in explaining your answers. A correctly labeled diagram must have all axes and curves clearly labeled and must show directional changes. If the question prompts you to “Calculate,” you must show how you arrived at your final answer. The table below shows unemployment and labor force statistics for an economy. Actual rate of unemployment 3% Natural rate of unemployment 4% Population of the country 125 million Number of people employed 97 million Number of people unemployed 3 million Number of people employed part time 5 million Number of discouraged workers 2 million (c) Given the state of the economy described in the table, is actual real output less than, greater than, or equal to potential real output? Explain. (d) Calculate what the cyclical unemployment rate would be if the actual rate of unemployment increased to 5 percent. Show your work.
== Assume that Co = 40, G = 220, T = 120, I = 150, X = 44, Z = M = 54, b = mpc = .75 and t =.25, the actual unemployment rate = 5.7%, and the natural unemployment rate is 5.1%. A one dollar increase in G will cause Y to increase by dollars. $2.439 $2.392 $2.305 $2.286 $2.253
Suppose that the employment rate is 61.0% and unemployment rate is 5.0%. What is the participation rate? (Submit your answer in percent terms with up to two decimals, i.e., 10.22 for 10.22% and 11.44 for 11.442%.)
Let u denote the unemployment rate, f the job- finding rate, and s the separation rate. The law of motion for the unemployment rate is (where Δυ Ut+1 ut is the change in the unemployment rate): Au suf (1 – u) Au fu - s (1 – u) Au = su + f(1 – u) = Au = s (1 – u) – fu Au = fu+ s (1 – u)
In August of 2020, the United States unemployment rate was 8.4%; in September, it was 7.8%. Which of the following is true? There is a 7.7% decrease in the United States unemployment rate from August to September, 2020. There is a 0.077 percentage point decrease in the United States unemployment rate from August to September, 2020. There was a 0.071 percentage point decrease in the United States unemployment rate from August to September, 2020. There was a 0.6% decrease in the United States unemployment rate from August to September, 2020. There was a 7.1% decrease in the United States unemployment rate from August to September, 2020.
In a macroeconomy where textile and information technology are among the major industries, the natural rate of unemployment is 5%. Although workers prefer full-time jobs, all industries have a combination of full-time and part- time (underemployed) workers. In 2010, the total population was 10 million with an adult population of 7.8 million, and real output for the year was $270 billion. In the same year, 4.5 million people were employed, 1.5 million people were part-time workers, and 300,000 people were unemployed. Furthermore 400,000 individuals stated that they were discouraged from searching for a job. (Question 4 of 7) Now, consider that at the beginning of 2011, the government implemented a five-year economic growth plan- a set of policies aimed at encouraging foreign investment in the information technology industry. The shift towards the information technology industry impacted the labor market. In addition, initial spillover effect from these investments includes changes in…
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What is the difference between the natural rate of unemployment vs. the full employment rate of unemployment? a) The natural rate of unemployment is the economy's long-run unemployme rate in the absence of government intervention while the full employment rate of unemployment is a policy preference initiated by Congress. Ob) The natural rate of unemployment ranges between 5-6% unemployment while the full employment rate of unemployment is lower, at about 4%. c) Both the natural rate of unemployment and the full employment rate of unemployment consist of the same 2 types of unemployment. d) All of the above are true.
If the unemployment rate is approximately 6.1% then it must be true that there is Unemployed = 5 million persons & Employed = 150 million persons Unemployed = 10 million persons & Employed = 155 million persons Unemployed = 2.5 million persons & Employed = 75 million persons Unemployed = 15 million persons & Employed = 175 million persons
Classify each statement about the U.S. unemployment rate as true or false. True False Answer Bank Changes in technology and new workers joining the workforce have coñtributed to an overall upward trend in the unemployment rate. It is very likely that an unemployment rate of 0% will never be observed. The end of the 20th century saw some of the highest rates of unemployment in US history. Unemployment generally remains stable and static over time, The behavior of the unemployment rate is related to the business cycle.

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