\f\fCHAPTER 7 2. (a) Labor Force Participation Rate = (Labor Force Total Population) 100 Labor Force = (Labor Force Participation Rate Total Population) 100 = (67 230,000,000) 100 = 154,100,000 (b) Unemployment Rate = (Number of Unemployed Labor Force) 100 = (85,000,000 154,100,000) 100 = 55.16% 3. (a) Seasonal unemployment (b) Cyclical unemployment (c) Structural unemployment (d) Frictional unemployment 5. No. This is because even at full employment some employment still exists since full employment implies that only cyclical unemployment is zero. The economy is constantly changing, with shifts in demand for individual products and changes in technology affecting certain industries harder than it affects others. As a result, there will always be some frictional, seasonal, and structural unemployment. A more generous system might lead to more unemployment since incentives to work would be lower and more people could qualify for benefits for, perhaps, a longer period of time. 7. 1993 = {(144.5 - 140.3) 140.3} 100 = 2.99% 1994 = {(148.2 - 144.5) 144.5} 100 = 2.56% 1995 = {(152.4 - 148.2) 148.2} 100 = 2.83% 1996 = {(156.9 - 152.4) 152.4} 100 = 2.95% 1997 = {(160.5 - 156.9) 156.9} 100 = 2.29% 1998 = {(163.0 - 160.5) 160.5} 100 = 1.56% 1999 = {(166.6 - 163.0) 163.0} 100 = 2.21% 2000 = {(172.2 - 166.6) 166.6} 100 = 3.36% 2001 = {(177.1 - 172.2) 172.2} 100 = 2.85% 2002 = {(179.9 - 177.1) 177.1} 100 = 1.58% 2003 = {(184.0 - 179.9) 179.9} 100 = 2.28% 2004 = {(188.9 - 184.0) 184.0} 100 = 2.66% 2005 = {(195.3 - 188.9) 188.9} 100 = 3.39% 2006 = {(201.6 - 195.3) 195.3} 100 = 3.23% 2007 = {(207.3 - 201.6) 201.6} 100 = 2.83% 2008 = {(215.3 - 207.3) 207.3} 100 = 3.86% 2009 = {(214.5 - 215.3) 215.3} 100 = -0.3% 2010 = {(218.1 - 214.5) 214.5} 100 = 1.68% 2011 = {(224. 9 - 218.1) 218.1} 100 = 3.12% 2012 = {(229.6 - 224. 9) 224. 9} 100 = 2.09% Years of inflation: 1995, 1996, 1999, 2000, 2003, 2004, 2005, 2008, 2010, and 2011 Years of disinflation: 1994, 1997, 1998, 2001, 2002, 2006, 2007, and 2012 Year of deflation: 2009 There was no hyperinflation CHAPTER 8 1. Labor productivity is measured by the amount of goods and services produced by one hour of labor. In other terms, measures the amount of real GDP produced by an hour of labor. Changes in labor productivity increase the U.S standard of living. 5. The country with a growth rate of 1% will be $122.02 in 20 years and $270.48 in 100 years. The country with growth rate of 2% will be $148.59 in 20 years and 724.46 in 100 years. 7. Technology that has caused unemployment: Computer software need less people to do the same job, tractors and other farm machines leaves farm workers unemployed. Technology that creates new jobs: GMO technology has created jobs in the seed producing industry, automotive industry created millions of industrial jobs. Technological advancements have been used in hospitals to improve health care. Therefore, I don't think we should pay much attention to the impact it has on overall employment and GDP in the United States. I think it is more important to come up with new innovations that will lead to creation of job opportunities