ECON 1BB3 Chapter 17: CHAPTER 17

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tealmammoth615

28 Oct 2018

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ECON 1BB3 Full Course Notes

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*note: adult population mean 16 and older who are not institutionalized (long term care facilities), not in the military (no flexibility), and not in prison. Stats can defines the labour force as the sum of the employed and the unemployed o labour force. = number of employed + number of unemployed. Unemployment rate is the percentage of labour unemployed o unemployment rate=#of unemployed/labour force x 100 o they can also do this for the entire population or narrow the rate into defined groups of age, gender, race, etc. In 2009 16. 85 million people were employed, 1. 52 million people were unemployed, and the adult population was 27. 31 million. Labour force = 16. 85 (employed) + 1. 52 (unemployed) = 18. 37 million people in the labour force lomoar cpsd| 2151316. Unemployment rate = 1. 52 (unemployed) /18. 37 (labour force) x 100 = 8. 3 percent were unemployed.

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Part 1:
Define each one as either employed, unemployed, not in the labor force, not in the adult population.

1) Felix is a 25-year-old professional tennis player. When he's not competing, he works as a coach at a local tennis club.
2) Janis is a 12-year-old student in Middle School. She babysitter younger brother and does other chores, for which her parents give her an allowance of $30 per week.
3) Rajiv is a 30-year-old who lost his job as a copyeditor for a local newspaper. He has spent the past few weeks out of work interviewing for other editing jobs. If his job search doesn'tsucceed after a few more weeks, he is thinking about going back to grad school.
4) Meagan is an 18-year-old who just graduated from high school. She is taking it easy this summer, relaxing by the pool with her friends, and volunteering part-time at a nursery.

Part 2:
The table below contains U.S. employment information from February 2008.
Civil Non-Institutional Population (16 years andolder)=232,809,00
Employed=145,993,000
Unemployed=7,318,000
Discouraged=396,000

The BLS has several measures of joblessness in addition to the official unemployment rate. One alternative in the U-4 measure of labor underutilized, which is calculated at the following:
U-4=(unemployed+discouraged)/(Labor force+discouraged)*100

Official Unemployment Rate=?
The U-4 measure of Labor underutilized=?

Part 3(connected to part 2):
The official unemployment rate and the U-4 measure of laborunderutilized are 2 different measures of joblessness in the economy. If the BLS were to include discouraged workers in the official unemployment rate, the reported unemployment rate would(increase/decrease).

Part 4:
Frictional Unemployment: 1.0%
Cyclical Unemployment: 0.8%
Structural Unemployment: 4.1%
Total Unemployment: 5.9%
Using the table above: True or False. The economy is currently at its natural rate of unemployment?

Part 5:
Define as either Structural, Frictional, or CyclicalUnemployment

1) Automobile demand as fallen during a recent recession, and Haley has been laid off from her job on the assembly line (I think it's cyclical but I'm not too sure)
2) Jack recently lost his job as a waiter at a local restaurant. A recent increase in minimum wage keeps local employers from adding more of the low-skill positions for which he qualifies, so he has been unable to find work. He continues to look for a job but reconsidering going back to school for vocational rate. (I think it's structural but not sure)

Part 6:
Suppose the world price of steel falls substantially. The demand for labor among steel production firms in Pennsylvania(increase/decrease). The labor demand among automobile producing firms in Michigan, for which steel is an input, will(increase/decrease). The unemployment resulting from such sectional shift in the economy is best described as(cyclical/structural/frictional/seasonal) unemployment.

I think it's decrease, decrease, and cyclical but not too sure.

Part 7:
Which of the following policies would reduce the natural rate of unemployment in the economy. More than one can apply.

1) An improvement to a widely used job-search website that allows it to match works to job vacancies more effectively.
2) Establishing government-run employment agencies to connect unemployed workers to job vacancies.
3) Offering recipients of unemployment insurance a cash bonus if they find a new job within a specified number of weeks

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ECON 1BB3 Chapter 17: CHAPTER 17

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