Extra Credit 1. The table below relates to the labor force classification of a p

Question

Extra Credit 1. The table below relates to the labor force classification of a particular country. Use the information to answer the questions that follows ull-time employed art-time employed million 26 million 14 million Unemployed Not in the Labor Force 30 million Calculate the following a. Labor Force (2 points) (2 points) (4 points) (4 points) b. Adult Population c. Unemployment rate d. Labor-Force participation rate e. If some of those actively looking for a job apparently give-up and become "discourage workers'. All else being the same, how would that affect unemployment rate and labor-force participation rate? Will they increase, decrease or stay the same? (5 points) f. If some of the part-time workers get a fulltime position, all else equal, how would that affect unemployment rate? Will it increase, decrease or stay the same? (3 points) g. Suppose there were a fraction of this population who are college students that only goes to school full-time but recently graduated and are all recently hired. All else being the same, how would that affect unemployment rate and labor-force participation rate? Will they increase, decrease or stay the same? (Hint: Assume all these people aged at least 16 years old even by the time they were going to college) (5 points)

Explanation / Answer

e)

Discouraged workers are not included as unemployed and they move out of labor force. Labor force will decrease. Unemployment rate will decrease as the number of unemployed is reduced. LFPR will also reduce.

f) Stay the same as employed includes both part time and full time employees.

g) Unemployment rate remains the same as the students were not part of labor force. The labor force will increase by the number of college students who are now employed. LFPR will increase.

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