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Why should we worry about the unemployment rate? (We know that the U.S. has an unemployment compensation program which provides income for those out of work. Why worry?)

Why should we worry about the unemployment rate? (We know that the U.S. has an unemployment compensation program which provides income for those out of work. Why worry?)

ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Why should we worry about the unemployment rate? (We know that the U.S. has an unemployment compensation program which provides income for those out of work. Why worry?) **Why is unemployment an economic problem?** Unemployment is an economic problem because of the concept of ( ___________________ ). Quite apart from any idea of consideration for others, unemployment is economic waste: A unit of labor resource that could be engaged in production is sitting idle. The “GDP gap” is the difference between ( ____________________ ) and ( ____________________ ). **What are the consequences of a negative GDP gap?** The consequence of a *negative GDP gap* is that what is not produced—the amount represented by the gap—is lost forever. Moreover, to the extent that this lost production represents capital goods, the potential production for the future is impaired. Future economic growth will be (more, less).
Transcribed Image Text:Why should we worry about the unemployment rate? (We know that the U.S. has an unemployment compensation program which provides income for those out of work. Why worry?) **Why is unemployment an economic problem?** Unemployment is an economic problem because of the concept of ( ___________________ ). Quite apart from any idea of consideration for others, unemployment is economic waste: A unit of labor resource that could be engaged in production is sitting idle. The “GDP gap” is the difference between ( ____________________ ) and ( ____________________ ). **What are the consequences of a negative GDP gap?** The consequence of a *negative GDP gap* is that what is not produced—the amount represented by the gap—is lost forever. Moreover, to the extent that this lost production represents capital goods, the potential production for the future is impaired. Future economic growth will be (more, less).
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