I am working on a problem for my Macro class... I could really use some help! In

Question

I am working on a problem for my Macro class... I could really use some help!

In March 2007, the US unemployment rate was 4.4 percent. In August 2008 the unemployment rate was 6.1 percent. Use this information to predict what happened between March 2007 and August 2008 to the numbers of
A. Job losers to and job leavers
B. Entrants and reentrants into the labor force.

I am confused as to what they are asking me to do. Obviously unemployment increased, which means either jobs were cut or were not available for people to get. Any help would be greatly appreciated!

Thank you in advance!

Explanation / Answer

The number of job losers probably increased and the number of job leavers probably did not change much. The rise in the unemployment rate is an indication that the economy was slowing and potentially entering a recession. Normally, in a slowing economy the number of job losers increases but the number of job leavers does not change much. Labor force entrants and reentrants probably increased because their changes tend to be in the same direction as the changes in job losers. And in a slowing, recessionary prone economy, job losers definitely increased.

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