Chapter 8: Q 36 (page 215)
Why do you think that unemployment rates are lower for individuals with more education?
Unemployment rate depicts percentage of individuals unemployed in total labor force
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Do you think it is rational for workers to prefer sticky wages to wage cuts, when the consequence of sticky wages is unemployment for some workers? Why or why not? How do the reasons for sticky wages explained in this section apply to your argument?
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?
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?
Using the above data, what is the unemployment rate? These data are U.S. statistics from 2010. How does it compare to the February 2015 unemployment rate computed earlier?
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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