Question

2. Labor Force Participation 75 % #Unemployed =50 million #Working Age Population 200 Million A) Calculate: #Employed, #Labor Force, #Not in Labor Force and Unemployment Rate B) If the economy was in recession and is now starting an expansion would we expect unemployment to increase or decrease? Which types of unemployment should change? C) The next unemployment numbers are reported and unemployment rises, is this consistent with your estímate in B? Explain why the increase in unemployment may be due to discouraged workers.

Answer 1

part A Labor Force Population =257. #unemployed = so million # working Age population - 200 million Total Labor Force = 200 x 257. 200x2S. los = Iso million Part A Corre = Unemployed Labor force - Employed a =100 million Not in labor Force = working age Laborare population Employed a - =so million Unemployment Rate 180 x 100 a 10o = 33.33 = 33.33% are unemployed

1 partß If an economy was in recession and is now starting an expansion would we expect unemployment will fall in the all economy. This happer bas production will rise which will lead to rise in the employment and fall in unemployment This will be change in structural unemployment. - Parte 2 Increase in unemployment may be I due to discourage workers because of the low wages paid to them that is the wages paid less - then the reservation wages I wages working making b/w working and non working7 Indifferent I This can be a result in rise in COM Whemployment Scanned with CamScanner