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CHAPTER 33: JOBS AND UNEMPLOYMENT
Questions and Exercises
1. The duration of unemployment rose in the 2008/09 recession. The likely cause
2. The rise in the duration of unemployment suggests that this most recent recession
3. Okun’s rule of thumb states that a 1 percentage point rise in the unemployment
4. a. Cyclical.
5. The reservation wage is the wage a person requires before accepting a job. The
6. Four reasons are that (1) the population has become younger, (2) more women
7. The concept of unemployment is normative because some people view
8. A person who believes unemployment is an individual's responsibility will believe
9. Not necessarily, although it could. It depends on the degree to which college
10. Any jobs program will impose some cost to society. One cost that any program
11. The jobs proposal provides a safety net to those people who really want to work
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© 2017 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
12. The guaranteed jobs program would be more expensive if it provided jobs useful
13. Limiting eligibility reduce the cost of the program. Students are a target for
Questions from Alternative Perspectives
1. Radical
a. The answer depends on normative judgments and cannot be answered based on
b. Achieving a low unemployment is desirable for the reasons that Vickrey states,
c. Some version of the guaranteed jobs program suggested in the text is the best
2. Feminist
Women tend to have greater burdens within the household, which means that they
3. Post-Keynesian
a. This is a normative question that has no answer based on positive economic
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© 2017 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
b. As I stated above I do not consider the global distribution of income fair. By
4. Religious
Yes, I believe it would. If the level of savings influences the level output which
influences the level of consumption and investment, the paradox of thrift is possible
Issues to Ponder
1. The answer to this question will depend on the student. Not having any income is
a significant incentive to find or create a job. Presumably someone who is taking
2. This is a matter of judgment about government and individual responsibility, and
judgments differ. Some argue that society owes everyone a job who wants one
3. What programs a government can do to lower structural unemployment is up to
4. The nature of the guaranteed jobs program for many people will be too focused
5. By reducing the "work requirement, the program could be made more appropriate
3
© 2017 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
4
© 2017 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in
any manner. This document may not be copied, scanned, duplicated, forwarded, distributed, or posted on a website, in whole or part.
