ECON: MACRO4
4th Edition
ISBN: 9781305436862
Author: William A. McEachern
Publisher: Cengage Learning
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Question
Chapter 7, Problem 1.1PA
To determine
Impact of unemployed workers on the labor force participation rate, size of labor force, and
Introduction:
Labor force participation rate refers to the proportion of the working age population available for work and actively seeking work. It is determined by dividing the labor force by the total population.
Size of labor force refers to the total number of people in the working age group available for work.
Unemployment rate is the proportion of the unemployed people in the country. It is determined by dividing the number of unemployed people by the labor force.
Expert Solution & Answer
Explanation of Solution
a. Due to 2 million unemployed workers who decided to return to the school, the labor force participation rate will decrease because labor force includes those people who are actively seeking the work. These have decided to return to the full-time school, so they are no longer the part of labor force.
b. The size of the labor force will decrease because labor force does not include people who are not seeking the work.
c. The unemployment rate will increase because the size of the labor force has decreased, and unemployment rate is determined by dividing the number of unemployed people by the labor force.
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Tasks
Exercise 1
Assess the following functions:
1. f(x)= x2+6x+2
2.f '(x)=10x-2x2+5
a. Find the stationary points. (5 marks)
b. Determine whether the stationary point is a maximum or minimum. (5 marks)
c. Draw the corresponding curves (5 marks)
Problem 2:
The sales data over the last 10 years for the Acme Hardware Store are as follows:
2003
$230,000
2008
$526,000
2004
276,000
2009
605,000
2005
328,000
2010
690,000
2006
388,000
2011
779,000
2007
453,000
2012
873,000
1. Calculate the compound growth rate for the period of 2003 to 2012.
2. Based on your answer to part a, forecast sales for both 2013 and 2014.
3. Now calculate the compound growth rate for the period of 2007 to 2012.
1. Based on your answer to part e, forecast sales for both 2013 and 2014.
5. What is the major reason for the differences in your answers to parts b and d? If you were to
make your own projections, what would you forecast? (Drawing a graph is very helpful.)
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