bui ticlpation rate (Chapter 3) for a y-population-500; population l6yearsorolde
ID: 1163764 • Letter: B
Question
bui ticlpation rate (Chapter 3) for a y-population-500; population l6yearsorolder and non- sti tutionalized = 400 - ployed and actively seeking work 20; people who have quit seeking work due to lack of success 10; part-time workers seeking ful-time jobs 30 ;people employed full- or part-time 200; people unem 2. What factors tend to understate the extent to which the official unemployment rate accurately measures the degree of economic hardship in the nation? factors lead som overstates economic hardship? What e observers to conclude that the official unemployment rate 3. Use the basic model shown in Figure 18.5 to illustrate graphically each of the following: (a) demand-deficient unemployment and (b) temporary increases in output and employment beyond their natural, or full-employment, levels Define the term structural unemployment and distinguish it from frictional and demand-deficient unemployment. Why might structural unemployment when demand-deficient unemployment declines? 5. Suppose you are an economic adviser to the president, who has asked you to design a program to reduce the amount of unemployment associated with dis- placed workers. What major elements would your plan include? characteristic for the ability of involuntary demand-deficient unemployment to persist for a considerable length of time? 6, Why are nominal wages inflexible downward? What is the implication of this et the official national unemployment rate rises from 4 percent to 8 per- SHOT ON MI DUAL CAMERA ML6Explanation / Answer
Answer 2:
Some economists consider the official unemployment rate to be understated while others consider official unemployment rate to be overstated. The factors which tend to understate the official unemployment rate are as follows:
1. It does not account for discouraged workers in the society. These are the workers who have temporarily given up on finding new jobs.
2. It does not separate part time workers from full time workers - It does not take into account the quality of jobs that the workers are doing.
3. It does not consider whether people are doing low paying jobs - The official unemployment rate does not address the issue of under employment in the country.
4. Other marginally attached workers are also excluded from the workforce.
The official unemployment rate might overstate the extent of unemployment because of unreported legal employment and unreported illegal employment. This occurs because Bureau of Labor Statistics is unable to verify the truthfulness of the information provided by the respondents. Some people might lie about their employment status. Because of the fear of law such things get unreported.
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