978-0133460629 Chapter 06 Part 10

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6.5 Essay: Labor Market Indicators

1) How does the Current Population Survey determine if a person should be counted in the

labor force?

Skill: Level 1: Deinition

Section: Checkpoint 6.1

Status: Old

AACSB: Written and oral communication

2) What is the deinition of the unemployment rate? How are part-time workers and

discouraged workers treated when calculating the unemployment rate?

Skill: Level 1: Deinition

Section: Checkpoint 6.1

Status: Old

AACSB: Written and oral communication

3) Deine the unemployment rate and labor-force participation rate. Discuss the diferences

between these two rates.

Skill: Level 3: Using models

Section: Checkpoint 6.1

Status: Old

AACSB: Written and oral communication

4) What is a “marginally attached worker”?

Skill: Level 1: Deinition

Section: Checkpoint 6.1

Status: Old

AACSB: Written and oral communication

5) What are the reasons some people choose to be part-time workers?

Skill: Level 1: Deinition

Section: Checkpoint 6.1

Status: Old

AACSB: Written and oral communication

6) The unemployment rate is 6 percent. If the population is 300 million, and the number

unemployed is 6 million and the number employed is 94 million, what is the size of the

labor force?

Skill: Level 3: Using models

Section: Checkpoint 6.1

Status: Old

AACSB: Analytical thinking

7) Suppose the current unemployment rate is 5 percent, the labor force is 400 million

people, the labor force participation rate is 80 percent and the working-age population is

500 million people. What number of people are unemployed?

Skill: Level 3: Using models

Section: Checkpoint 6.1

Status: Old

AACSB: Analytical thinking

8) Suppose that the population is 275 million. Also assume that the labor force is 135

million and that 130 million people are employed. Calculate the unemployment rate.

Skill: Level 3: Using models

Section: Checkpoint 6.1

Status: Old

AACSB: Analytical thinking

9) Suppose the population is 220 million people, the labor force is 150 million people, the

number of people employed is 130 million and the working-age population is 175 million

people. What is the unemployment rate?

Skill: Level 3: Using models

Section: Checkpoint 6.1

Status: Old

AACSB: Analytical thinking

10) Suppose the working-age population is 150 million, the labor force is 125 million, and

employment is 120 million.

a. What is the unemployment rate?

b. Now suppose that 2 million students graduate from college and begin to look for jobs.

What is the new unemployment rate if none of the students have found jobs yet?

c. Suppose that all 2 million students ind jobs. What is the unemployment rate now?

Skill: Level 3: Using models

Section: Checkpoint 6.1

Status: Old

AACSB: Analytical thinking

11) Suppose there are 180 million employed people and 20 million unemployed people.

a. What is the unemployment rate?

b. Suppose that 5 million unemployed people give up their search for jobs and become

discouraged workers. What is the new unemployment rate?

Skill: Level 3: Using models

Section: Checkpoint 6.1

Status: Old

AACSB: Analytical thinking

12) Consider the following scenario. Initially the economy has 90 million people working,

10 million people unemployed, and 20 million people not in the labor force. Then prospects

for the economy improve. Five million people who previously were not in the labor force

now join the 10 million previously unemployed in looking for work. For now, the economy

remains with 90 million workers. What happens to the unemployment rate?

Skill: Level 3: Using models

Section: Checkpoint 6.1

Status: Old

AACSB: Analytical thinking

13) Based on the information in the above table, what is the unemployment rate?

Skill: Level 3: Using models

Section: Checkpoint 6.1

Status: Old

AACSB: Analytical thinking

14) Based on the information in the above table, what is the labor force participation rate?

Skill: Level 3: Using models

Section: Checkpoint 6.1

Status: Old

AACSB: Analytical thinking

6.6 Essay: Labor Market Trends and Fluctuations

1) How does the unemployment rate change in a recession and in an expansion?

Skill: Level 1: Deinition

Section: Checkpoint 6.2

Status: Old

AACSB: Relective thinking

2) Over the last 50 years, how has

a. the labor force participation rate changed?

b. the men’s and women’s labor force participation rates changed?

Skill: Level 2: Using deinitions

Section: Checkpoint 6.2

Status: Old

AACSB: Written and oral communication

3) Over the last 50 years, how has the women’s labor force participation rate changed?

What are reasons for this change?

Skill: Level 2: Using deinitions

Section: Checkpoint 6.2

Status: Old

AACSB: Written and oral communication

4) Explain how the labor force participation rate, the unemployment rate, and the

percentage of the labor force employed part time change in a recession.

Skill: Level 2: Using deinitions

Section: Checkpoint 6.2

Status: Old

AACSB: Written and oral communication

6.7 Essay: Unemployment and Full Employment

1) What are the three types of unemployment and how do they change over the business

cycle?

Skill: Level 2: Using deinitions

Section: Checkpoint 6.3

Status: Old

AACSB: Written and oral communication

2) Deine and give an example of how a spell of frictional unemployment can begin.

Skill: Level 2: Using deinitions

Section: Checkpoint 6.3

Status: Old

AACSB: Written and oral communication

3) Can frictional unemployment ever be totally eliminated? Explain your answer.

Skill: Level 2: Using deinitions

Section: Checkpoint 6.3

Status: Old

AACSB: Written and oral communication

4) Explain the diference between frictional and structural unemployment.

Skill: Level 2: Using deinitions

Section: Checkpoint 6.3

Status: Old

AACSB: Written and oral communication

5) Deine and give an example of how a spell of structural unemployment can begin.

Skill: Level 2: Using deinitions

Section: Checkpoint 6.3

Status: Old

AACSB: Written and oral communication

6) Explain what type of unemployment changes with the business cycle and how it changes.

Skill: Level 2: Using deinitions

Section: Checkpoint 6.3

Status: Old

AACSB: Written and oral communication

7) Why is there unemployment even when the economy is at “full employment”?

Skill: Level 2: Using deinitions

Section: Checkpoint 6.3

Status: Old

AACSB: Written and oral communication

8) Explain the relationship(s) between full employment, cyclical unemployment, the natural

unemployment rate, and potential GDP.

Skill: Level 1: Deinition

Section: Checkpoint 6.3

Status: Old

AACSB: Written and oral communication

9) For the past decade, the unemployment rate in Western Europe has been higher than the

unemployment rate in the United States. Based on this fact, is the natural unemployment

rate larger in Western Europe or in the United States? Why might the natural rates difer

between the two areas?

Skill: Level 3: Using models

Section: Checkpoint 6.3

Status: Old

AACSB: Written and oral communication

10) Consider the following statement: “Real GDP and potential GDP are always equal.” Is

this statement true or false? Explain your answer.

Skill: Level 2: Using deinitions

Section: Checkpoint 6.3

Status: Old

AACSB: Written and oral communication

11) What is the relationship over the business cycle of potential GDP and real GDP?

Skill: Level 2: Using deinitions

Section: Checkpoint 6.3

Status: Old

AACSB: Written and oral communication

12) Explain the relationship between real GDP and potential GDP and between the

unemployment rate and the natural unemployment rate as the economy moves through a

business cycle.

Skill: Level 2: Using deinitions

Section: Checkpoint 6.3

Status: Old

AACSB: Written and oral communication