Chapter 21: Q. 39 (page 525)
Under what condition would an increase in the unemployment rate be a positive sign?
An increase in the unemployment rate will be a positive sign when the discouraged workers start looking for work again.
Over 30 million students worldwide already upgrade their learning with Vaia!
All the tools & learning materials you need for study success - in one app.
Get started for free
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?
If you are out of school but working part-time, are you considered employed or unemployed in U.S. labor statistics? If you are a full-time student and working 12 hours a week at the college cafeteria are you considered employed or not in the labor force? If you are a senior citizen who is collecting social security and a pension and working as a greeter at Wal-Mart are you considered employed or not in the labor force?
If many workers become discouraged from looking for jobs, explain how the number of jobs could decline but the unemployment rate could fall at the same time.
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 pursue a goal of zero unemployment? Why or why not?
What do you think about this solution?
We value your feedback to improve our textbook solutions.
