Econ Macro (book Only)
6th Edition
ISBN: 9781337408745
Author: William A. McEachern
Publisher: Cengage Learning
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Chapter 7, Problem 5P
To determine
Full employment,
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Why are the advantages for the economy of extending unemployment benefits? Name three or
more negative effects of unemployment that the government might want to avoid.
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people, what is the unemployment rate?
Chapter 7 Solutions
Econ Macro (book Only)
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- What term describes the remaining level of unemployment that occurs even when the economy is healthy?arrow_forward12 Suppose 20 million people are employed, and 5 million are unemployed. What is the unemployment rate? Does that number change if we also state that there are an additional 30 million people who are not in the civilian labor force?arrow_forward(Measuring Unemployment) Determine the impact on each of the following if 2 million formerly unemployed workers decide to return to school full time and stop looking for work: a. The labor force participation rate b. The size of the labor force c. The unemployment ratearrow_forward
- Problem 2. The population of the economy is equal to 100. Forty percent of the population are not in the labor force. Six percent of the population are unemployed. 1. What is the unemployment rate in this economy? 2. Suppose that the number of people out of the labor force is constant, so that all movements in the labor market are between employment and unemployment. The share of the unemployed who find employment is equal to 18% in each period, and the share of the employed who lose their jobs is equal to 2% in each period. According to the bathtub model, what is the natural rate of unemployment? 3. The government considers a law that would raise the cost of firing workers. As a result, the job separation rate is expected to decline to just 1% per period. However, the law makers are worried about a potential side-effect of the policy: firms might become less willing to hire people leading to a decline in the job finding rate. How much should the job finding rate decline in order to…arrow_forward9. _______________________ happens when the economy is producing at its potential and unemployment is at the natural rate of unemployment. (A) The foreign price effect (B) Stagflation (C) Full employment GDP (D) The interest rate effectarrow_forward(Measuring Unemployment) Suppose that the U.S. noninstitutional adult population is 230 million and the labor force participation rate is 67 percent. a. What would be the size of the U.S. labor force? b. If 85 million adults are not working, what is the unemployment rate?arrow_forward
- 32- If there is inflation and high unemployment in an economy, there is X in this economy.” Find the correct expression that replaces X in the sentence. a) national income B) Deflation NS) stagflation D) Inflation TO) full employmentarrow_forward8 The economy has part time workers of 20 million people, and full time workers of 140 million people. There are 5 million who have no job and search for one. Lastly, 5 million who have no job but stop searching while waiting for a positive mood in the economy. The unemployment rate in the economy is (Your answer should include the first decimal point if there is.) Your Answer: %. Answerarrow_forward8. The attached charts (Quits: Total Nonfarm) shows the quit rate (the number of who quit their job during the entire month as a percentage of total employment) and the unemployment rate (U-3). (a) All else constant, what effect does an increase in the quit rate have on the unemployment rate? (b) Do you consider job quits as frictional or structural unemployment? Why? (c) What happens to the quit rate during the recession of 2008? Why? Do we see the same effect in the recession of 2020? (d) What happened to the unemployment rate during the recessions of 2008 and 2020? How do you reconcile this answer with your answers for items (a) and (c)? (e) Use your answers to explain why the unemployment rate will never fall to zero and a certain amount of unemployment is desirable.arrow_forward
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