Problems and Applications QS

Economists use labor$-$market data to evaluate how well an economy is using its most valuable resource$-$its people. Two closely watched statistics are the unemployment rate and the employment$-$population ratio $($calculated as the percentage of the adult population that is employed$).$

Indicate what happens to the unemployment rate and the employment$-$population ratio in each of the following scenarios.

Effect On$...$

Employment$-$Population

Scenario

Unemployment Rate

A financial firm goes bankrupt and lays off its workers, who immediately start working in other finandal firms.

After an unsuccessful search, some laid$-$off workers quit looking for new jobs.

Numerous students graduate from college but cannot find work.

A stock market crash leads to large$-$scale lay$-$offs of workers aged $55$ and above, who decide to retire instead of looking for new jobs. Ratio

Stavs the same grad

Decreases

Increases

Decreases

Decreases

Decreases

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