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Chapter 8: "Q.19" (page 214)

When would you expect cyclical unemployment to be rising? Falling?

Short Answer

Expert verified

Increase during recession and fall during expansion.

Step by step solution

01

Step.1 Introduction 

Unemployment can be defined as the situation when a person who is able to work and is work, is also actively looking for jobs but is not able to find one. The type of unemployment caused by the cyclical fluctuations is known as cyclical unemployment.

02

Step.2 Explanation 

Cyclical unemployment will fall when an economy is doing goods and is in the phase of expansion. Because in the time of expansion the firms will hire a greater number of people. An increase in labor demand would cause rightward shift in the demand curve, increasing employement.

Cyclical unemployment will rise when the economy is not doing good and is in a state of recession. Because at the time of recession the firms will hesitate from hiring people. An decrease in labor demand would cause leftward shift in the demand curve, reducing employement.

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Most popular questions from this chapter

If you are out of school but working part time, are you considered employed or unemployed in U.S. labor statistics? If you are a full time student and working 12 hours a week at the college cafeteria are you considered employed or not in the labor force? If you are a senior citizen who is collecting social security and a pension and working as a greeter at Wal-Mart are you considered employed or not in the labor force?

If many workers become discouraged from looking for jobs, explain how the number of jobs could decline but the unemployment rate could fall at the same time.

Assess whether the following would be counted as “unemployed” in the Current Employment Statistics survey.

a. A husband willingly stays home with children while his wife works.

b. A manufacturing worker whose factory just closed down.

c. A college student doing an unpaid summer internship.

d. A retiree.

e. Someone who has been out of work for two years but keeps looking for a job.

f. Someone who has been out of work for two months but isn’t looking for a job.

g. Someone who hates her present job and is actively looking for another one.

h. Someone who decides to take a part time job because she could not find a full time position.

Are U.S. unemployment rates distributed evenly across the population?

Over the long term, has the U.S. unemployment rate generally trended up, trended down, or remained at basically the same level?
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