Question

2. Web Activity- The Bureau of Labor Statistics publishes the Occupational Outlook Handbook, which can be found at www.bls.govlocol. What are the employment prospects in your choser profession (or one that you might consider)? What factors will create jobs (or decrease the number of jobs) in this field? What impact would each of the following have on the full employment unemployment rate? b. A permanent decline in tourism-oriented jobs caused by a fear of traveling due to terrorist c. A decline in tourism-oriented jobs at hotels, restaurants, and theme parks due to d. Social Security reform provides senior citizens with an incentive to re-enter the labor 3. The entry of a large number of young workers into the labor force due to the baby boom echo (the children of baby boomers). a. threats. recession. force. Chapter 9

Answer 1

Unemployment at full employment is that unemployment which considers only frictional unemployment (caused by people changing one job to another job) and structural unemployment (caused due to change in skill needs, change in technology, dying of old industries, etc.), and not cyclical unemployment (which occurs due to fluctuations in demand and supply of labor).

a. Entry of a large number of new workers into labor force will increase the supply of labor as compared to its demand, and hence will cause increase in cyclical unemployment. So there will be no impact on Unemployment at full employment.

b. Since there is permanent decline in tourism industry, tourism industry is dying because of terrorist threats, and hence will increase structural unemployment. So there will be increase in Unemployment at full employment.

c. Decline in tourism industry due to recession will cause increase in cyclical unemployment. So there will be no impact on Unemployment at full employment.

d. Social Security reform provides incentive to senior citizens to re-enter the labor force, and by that, will increase labor supply. Hence, it will increase cyclical unemployment. So there will be no impact on Unemployment at full employment.