Consider a hypothetical economy in which the labor force consists of 200 people. Of those, 190...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Consider a hypothetical economy in which the labor force consists of 200 people. Of those, 190 people are employed full-time and 10 people are unemployed. The economy follows the same conventions as the U.S. Bureau of Labor Statistics (BLS) in computing its employment figures. Therefore, initially the unemployment rate is calculated as follows: Unemployment Rate Number of Unemployed People Number of People in the Labor Force 10 x 100 200 5% x 100 Suppose a reduction in foreign demand for this economy's products causes an economic recession-a prolonged period of declining output. The following table offers two possible scenarios resulting from the recession. Calculate the unemployment rate associated with each scenario in the following table. Assume that each scenario describes the only labor market changes in this economy. Scenario A: Firms reduce work hours by 20%. The number of involuntary part-time workers rises as firms respond to the reduction in the demand for their products by reducing the hours of each employed person from 40 to 32 hours per week. B: Firms reduce employment by 20%. The number of unemployed workers rises as firms respond to the reduction in the demand for their products by laying off 38 previously employed workers. Unemployment Rate % Consider a hypothetical economy in which the labor force consists of 200 people. Of those, 190 people are employed full-time and 10 people are unemployed. The economy follows the same conventions as the U.S. Bureau of Labor Statistics (BLS) in computing its employment figures. Therefore, initially the unemployment rate is calculated as follows: Unemployment Rate Number of Unemployed People Number of People in the Labor Force 10 x 100 200 5% x 100 Suppose a reduction in foreign demand for this economy's products causes an economic recession-a prolonged period of declining output. The following table offers two possible scenarios resulting from the recession. Calculate the unemployment rate associated with each scenario in the following table. Assume that each scenario describes the only labor market changes in this economy. Scenario A: Firms reduce work hours by 20%. The number of involuntary part-time workers rises as firms respond to the reduction in the demand for their products by reducing the hours of each employed person from 40 to 32 hours per week. B: Firms reduce employment by 20%. The number of unemployed workers rises as firms respond to the reduction in the demand for their products by laying off 38 previously employed workers. Unemployment Rate %
Expert Answer:
Related Book For
Posted Date:
Students also viewed these economics questions
-
QUESTION 1 What is the yield-to-maturity of a bond with a coupon rate of 9.6%, par value of $3000, 6 years until maturity, and a value of $987.97 if coupons are paid annually with the next one due in...
-
Suppose that the natural rate of unemployment is 4.8 percent for adult males, 4.5 percent for adult females, and 13.4 percent for teenagers. Fifty-five percent of the labor force consists of adult...
-
8. The terminology of technological advancement The discovery of a product or process is called invention Charles, the president of a company that makes electronic devices, borrows a large sum of...
-
Record the following transactions in Journal. Post them into ledger and prepare a Trial Balance. Jan 1; Jan 2; Jan 10 Jan 15 Jan 20 Jan 28 Jan 31 Started business with cash Rs. 80,000 Bought...
-
To implement a credit policy intended to expand liquidity of the banking system, the Fed desires to increase its assets by lending to a substantial number of banks. How might the Fed adjust the...
-
Twenty people leaving a cinema are each asked, How many times have you attended the cinema in the past year? Their responses are: 6, 2, 13, 1, 4, 8, 11, 3, 4, 16, 7, 20, 13, 5, 15, 3, 12, 9, 26 and...
-
Information from Goddard Picture Frames cash account as well as the January bank statement is presented next. Requirements 1. Prepare the bank reconciliation on January 31. 2. Prepare all necessary...
-
A pair of point charges, q = + 8.00µC and q' = - 5.00 µC, are moving as shown in Fig with speeds u = 9.00 X 104 m/s and u' = 6.50 X 104 m/s. When the charges are at the locations shown in...
-
The owners of a corporation are its shareholders. If a corporation has only one class of shares, they typically are labeled common shares. Indicate the ownership rights held by common shareholders,...
-
In all types of organizations, i.e. production, manufacturing, services, educational institutions, financial institutions and so forth, there are individuals in leadership positions. These are heads,...
-
Provide a brief summary of the case. 2. Do you think that this case contains the five elements to prove negligence? Explain using legal reasoning and facts. 3. How would you rule in this case?...
-
A body temperature of 97.0 F is slightly lower than the "normal" value but is still considered acceptable as an individual's temperature can have variable norms. What would this temperature equate to...
-
Explain how to become a stockbroker in Canada and France and how to achieve your Chartered Financial Analyst (CFA) certification in both countries .The investigation should be somewhat detailed in...
-
In performing accounting services for small businesses, you encounter these situations pertaining to cash sales. 1. Cullumber Company enters sales and sales taxes separately on its cash register. On...
-
5. (5 points) A 600-pound boat sits on a ramp which has an incline of at 30 above horizontal. Find the force required to keep the boat from rolling down the ramp.
-
Blue Apron was one of the first meal-kit companies, and the first to have an IPO. Meal-kit companies like Blue Apron offer pre-prepped, pre-packaged, fresh raw foods in appropriate amounts to create...
-
The process of collaborative goal setting by a manager and subordinate, the extent to which goals are accomplished is a major factor in evaluating and rewarding the subordinate's performance. It is...
-
Illustrate Sue's new budget constraint and indifference curve in a diagram from the data in Problem F-3. Illustrate also the utility-maximizing combination of goods?
-
Suppose that the quantity of money in circulation is fixed but the income velocity of money doubles. If real GDP remains at its long-run potential level, what happens to the equilibrium price level?
-
The following table represents the hourly output and cost structure for a local pizza shop. The market is perfectly competitive, and the market price of a pizza in the area is $10. Total costs...
-
A nurse at a medical center claims that the median number of flu shots they give per day is 30. To test the claim, the nurse randomly selects 20 days during the months of September, October, and...
-
The Pennsylvania Turnpike Commission allows travelers to use a purchased Easy Pass for tolls on the Pennsylvania Turnpike. A researcher hypothesizes that the median of the number of Easy Pass users...
-
Two independent random samples of army and marine recruits are selected, and the time in minutes it takes each recruit to complete an obstacle course is recorded, as shown in the table. At...
Study smarter with the SolutionInn App