Question

3. What impact would each of the following have on the full employment unemployment rate? 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. 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. S threats. recession. ocial Security reform provides senior citizens with an incentive to re-enter the labor force.

Answer 1

A) In this case as it is clearly evident that there is a large increase in the size of workforce due to the entry of young workers so , now more people will be unemployed and this will ultimately increase the unemployment rate at full employment.

B) As per the scenario there could be increase in unemployment rate in that particular sector i.e tourism department but apart from the region of terrorist threats , people will spend the money that they saved for tourism on other goods and services on the other parts of country and thus the increasing employement in those areas,
thus the increase in employment in other industries will outweight the decrease of employment in tourism sector. This will result in no absolute change in the unemployment full employment rate

C) A recession is a state of economy which is mainly characterised by contraction of economy due to which the economy automatically witnesses huge unemployment that even exceeds the normal unemployment full employment rate , therefore it can be concluded that as this situation is a outcome or a result of recession so no such thing jas changed to put any more imapct on full employment unemployment rate.

D) with the entry of senior citizens now again enteringbthe labour markets will considerably inctease the number of the workforce, with this increase in size of labour force ofcourse the unemployment rate at full employment will raise with the raise in labour supply .

2) When the price levels will increase as fast as the income people might feel worse off because the increased income earned will be used on the same products which are more priced now ,( which they used to afford when income was less ) therefore because of no improvement in standard of living and no new purchase of increased quality or advanced products which they otherwise aspired to buy due to increase in income, will not be afforded as their prices would have also increased , therefore due to all these reasons they might feel worse off..

But in reality the increase in the price ,which actually means the inflation does not necessarily alter with the income of individuals because of composite rate of inflation is not faced by individual personally .

But If the increase in price of goods and services purchased by individuals is more than the rate of inflation then obviously the real income will decrease , and individual might feel worse off.

Hope i explained well, read carefully.

Good luck . :)