The table below shows unemployment and labor force statistics for an economy. Actual rate of unemployment Natural rate of unemployment Civilian, noninstitutional population age 16 and over Number of people employed full time Number of people employed part time Number of people unemployed Number of discouraged workers 3% 4% 125 million 92 million 5 million 3 million 2 million (a) Calculate the size of the labor force. Show your work. (b) Calculate the labor force participation rate. Show your work. (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. (e) Suppose discouraged workers reenter the labor force and find employment. Will the actual rate of unemployment increase, decrease, or stay the same?
The table below shows unemployment and labor force statistics for an economy. Actual rate of unemployment Natural rate of unemployment Civilian, noninstitutional population age 16 and over Number of people employed full time Number of people employed part time Number of people unemployed Number of discouraged workers 3% 4% 125 million 92 million 5 million 3 million 2 million (a) Calculate the size of the labor force. Show your work. (b) Calculate the labor force participation rate. Show your work. (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. (e) Suppose discouraged workers reenter the labor force and find employment. Will the actual rate of unemployment increase, decrease, or stay the same?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter21: Unemployment
Section: Chapter Questions
Problem 16RQ: Assess whether the following would be counted as unemployed in the Current Employment Statistics...
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Transcribed Image Text:The table below shows unemployment and labor force statistics for an economy.
Actual rate of unemployment
Natural rate of unemployment
Civilian, noninstitutional population age 16 and over
Number of people employed full time
Number of people employed part time
Number of people unemployed
Number of discouraged workers
3%
4%
125 million
92 million
5 million
3 million
2 million
(a) Calculate the size of the labor force. Show your work.
(b) Calculate the labor force participation rate. Show your work.
(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.
(e) Suppose discouraged workers reenter the labor force and find employment. Will the actual rate of
unemployment increase, decrease, or stay the same?
Expert Solution
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“Since you have posted a question with multiple sub parts, we will provide the solution only to the first three sub parts as per our Q&A guidelines. Please repost the remaining sub parts separately.”
Unemployment is a condition where one is able and seeking to work but unable to find a suitable one. The unemployed person should be an active member of the labor force.
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