Chapter 21: Problem 10
Are all adults who do not hold jobs counted as unemployed?
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Why is there unemployment in a labor market with flexible wages?
Assess whether the following would be counted as "unemployed" in the Current Employment Statistics survey. a. A husband willingly stays home with children while his wife works. b. A manufacturing worker whose factory just closed down. c. A college student doing an unpaid summer internship. d. A retiree. e. Someone who has been out of work for two years but keeps looking for a job. f. Someone who has been out of work for two months but isn't looking for a job. g. Someone who hates her present job and is actively looking for another one. h. Someone who decides to take a part time job because she could not find a full time position.
Is it desirable to eliminate natural unemployment? Why or why not? Hint: Think about what our economy would look like today and what assumptions would have to be met to have a zero rate of natural unemployment.
Would you expect hidden unemployment to be higher, lower, or about the same when the unemployment rate is high, say \(10 \%,\) versus low, say 4\%? Explain.
The U.S. unemployment rate increased from 4.6\% in July 2001 to \(5.9 \%\) by June \(2002 .\) Without studying the subject in any detail, would you expect that a change of this kind is more likely to be due to cyclical unemployment or a change in the natural rate of unemployment? Why?
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