Answered: This is a graph of 3 measures of…

Principles of Economics 2e

2nd Edition

ISBN:9781947172364

Author:Steven A. Greenlaw; David Shapiro

Publisher:Steven A. Greenlaw; David Shapiro

Chapter22: Inflation

Section: Chapter Questions

Problem 20RQ: What is indexing?

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This is a graph of 3 measures of unemployment from the period just before the great recession to just before the covid 19 recession The red line, is the unemployment rate including discourage workers and workers marginally attached to the labor force.

The Blue line is the unemployment rate as measured by the BLS

The Green line is the Natural rate of unemployment, the target rate, the NAIRU.

The gray bar represents the recession of 2008, and the subsequent recovery of the economy afterwards. This was evidenced by a gradual increase in GDP. Is the pattern of all 3 series what you would expect in terms of the behavior of all 3. Provide reasons for your answers.Your answer should include reference to AD/AS or the AE model.

FRED
12
10
4
3
Unemployment Rate
Total Unemployed, Plus Discouraged Workers, Plus All Other Persons Marginally Attached to the Labor Force, as a Percent of the Civilian Labor Force Plus All Parsons Marginally Attached to the Labor
Force (
-Natural Rate of Unemployment (Short-Term) (DISCONTINUED)
Jan 2009
Shaded areas indicate U.S. recessions
Jan 2006
Jan 2009
Jan 201
Jan 2011
Jan 2012
Sources: BLS, CBO
Jan 2015
Jan 2014
Jan 2017
201
Jan 2019
fred stouisted org

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