Chapter 7: Q.7.1 (page 142)
Explain how the U.S. government calculates the official unemployment rate
The U.S government conducts a survey consistently called the Current Population Survey to measure the degree of unemployment in the country.
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In a country with a labour force of 200, a different group of 10 people becomes unemployed each month but becomes employed once again a month later. No others outside these groups are unemployed.
a. What is this country's unemployment rate?
b. What is the average duration of unemployment?
c. Suppose that establishment of a system of unemployment compensation increases to two months the interval that it takes each group of job losers to become employed each month. Nevertheless, a different group of 10 people still becomes unemployed each month. Now, what is the average duration of unemployment?
d. Following the change discussed in part (c), what is the country's unemployment rate?
In what way are the PPI and CPI likely to diverge for a while following a sustained increase in import prices? Explain briefly.
Suppose that you are given the following information:
a. If the labour force participation rate is 65 per cent, what is the labour force?
b. How many workers are employed?
c. What is the unemployment rate?
Between 2017 and 2018 in a particular nation, the value of the consumer price index for which the base year is 2014 -rose by 9.091 per cent, to a value of 120 in 2018. What was the value of the price index in 2017?
In 2016, the cost of a market basket of goods was \(2,000. In 2018, the cost of the same market basket of goods was \)2,100. Use the price index formula to calculate the price index for 2018 if 2016 is the base year.
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