Chapter 21: Q 15. (page 524)
What criteria do the BLS use to count someone as
employed? As unemployed?
There are different criteria for the employed person and unemployed person.
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What term describes the remaining level of unemployment that occurs even when the economy is healthy?
Many college students graduate from college before they have found a job. When graduates begin to look for a job, they are counted as what category of unemployed?
While unemployment is highly negatively correlated with the level of economic activity, in the real world it responds with a lag. In other words, firms do not immediately lay off workers in response to a sales decline. They wait a while before responding. Similarly, firms do not immediately hire workers when sales pick up. What do you think accounts for the lag in response time?
What happens to the labor force participation rate when employed individuals are reclassified as unemployed? What happens when they are reclassified as discouraged workers?
Is a decrease in the unemployment rate necessarily a good thing for a nation? Explain.
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