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Chapter 7: Q.2 For critical thinking (page 158)

Why do you suppose that some economists argue that if part-time employment rises while unemployment remains unchanged, the economy has moved further from full employment?

Short Answer

Expert verified

Some economists argue that if part-time employment rises while unemployment remains unchanged, the economy has moved further from full employment as it will diminish compulsory unemployment in the short run.

Step by step solution

01

Introduction

Assuming that part-time employment rises, it will diminish the compulsory unemployment in the short-run, yet unemployment or normal pace of unemployment or the pace unemployment will continue as before over the long haul.

02

Explanation

A lessening in compulsory unemployment in the short run will cause an ascent in expansion. The expansion will expand the expense of creation and again loss of employment will start. Subsequently, greater unemployment will move us further from full employment over the long haul when part-time employment rises.

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Most popular questions from this chapter

Suppose that in 2019 there is a sudden, unanticipated burst of inflation. Consider the situations faced by the following individuals. Who gains and who loses?

a. A homeowner whose wages will keep pace with inflation in 2019 but whose monthly mortgage payments to a savings bank will remain fixed

b. An apartment landlord who has guaranteed to his tenants that their monthly rent payments during 2019 will be the same as they were during 2018

c. A banker who made an auto loan that the auto buyer will repay at a fixed rate of interest during 2019

d. A retired individual who earns a pension with fixed monthly payments from her past employer during 2019

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