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ECO100Y5 Chapter Notes - Chapter 8: Underemployment, Real Wages, Menu Cost

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ECO100Y5 Full Course Notes

ECO100Y5 Full Course Notes

Document Summary

Employment is the total number of people in the economy (aged 15 and older) currently employed, in either a full-time of part-time paid job. Unemployment is the number of available people (aged 15 and older) who are actively looking for paid work but aren"t currently employed. The labour force is equal to the sum of the total number of employed people (employment) and the total number of unemployed people (unemployment) aged 15 or older in all cases. The labour force participation rate is the percentage of population aged 15 or older that is in the labour force: labour force participation rate = (labour force/population. The unemployment rate is the percentage of the labour force aged 15 or older) x100 that is unemployed: unemployment rate = (number of employed workers/labour force) x100. Can overstate the true level of unemployment for example people who have found a job and will start working in a couple weeks count as unemployed.

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Related Questions

If the labour force participation rate is 90%, employment is 140 million, there are 20 million adults not in the labour force, what is the unemployment rate? How does one find the number of people that are unemployed and how does one get the answer of 22.2%?

pearyellowjacket200

Consider a hypothetical economy in which the labour force consists of 100 people. Of those, 85 people are employed full time and 15 people are unemployed. The government of this economy follows the same conventions as the BLS in computing its employment figures. The unemployment rate is simply the number of unemployed people divided by the number of people in the labour force. Initially, then, the unemployment rate is (15/100) x 100% = 15.0%

Suppose a reduction in foreign demand for this economy's products causes an economic recession-a prolonged period of declining output. The following table offers two different possible scenarios resulting from the recession. Calculate the unemployment rate associated with each scenario

2. Firms reduce work hours by 25%. The number of underemployed workers rises as firms respond to the reduction in the demand for their products by reducing the hours of each employed person from 40 to 30 hours per week.

3. Firms reduce employment by 25%. The number of unemployed workers rises as firms respond to the reduction in the demand for their products by laying off 21 previously employed workers.

4. The unemployment rate in scenario 3 ____ the true extent of underemployment in the economy because the BLS counts part-time workers as employed.

5. Consider a hypothetical economy in which potential output is $400 billion and the natural rate of unemployment is 6%. The current employment rate is 7.4%. Since the unemployment rate is greater than the natural rate of unemployment, the economy's actual GDP will be ____ potential GDP.

B. Greater than

6. The burden of an increase in the economy-wide unemployment rate can differ widely across regions and different groups of people. For example, in the United States, the jobless rate among minorities has tended to be ___ than the jobless rate among whites.

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TOTAL CIVILIAN POPULATION AGE 16 AND OLDER: 233.8 million
NOT IN LABOR FORCE: 79.5 million
CIVILIAN FORCE TOTAL: 154.3 million
- EMPLOYED: 145.4 million
- UNEMPLOYED: 8.9 million
CIVILIAN UNEMPLOYMENT RATE: 5.8%

suppose 5 million originally discouraged workers have come back tothe job markets looking for jobs. Suppose 2 million of them havefound jobs and thus become employed. Then how much is the laborforce participation rate?

%
Please enter 2 digits after the decimal point.