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Chapter 8: Q.2 (page 213)

Using the above data, what is the unemployment rate? These data are U.S. statistics from 2010. How does it compare to the February 2015 unemployment rate computed earlier?

Short Answer

Expert verified

Unemployment would be higher.

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 percentage of working population that cannot find work is known as unemployment rate.

02

Step.2 Explanation

The unemployemnt rate is obtained as a ration of unemployed persons and total labor force.

Unemploymentrate=UnemployedpersonsLaborforce×100=14.8153.9×100=9.6%

So, the unemployment rate for 2010 is 9.6%.

The unemployment rate for February 2015 was computed as 5.5%. This means the 2010 unemployment rate is greater.

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Most popular questions from this chapter

While unemployment is highly negatively

correlated with the level of economic activity, in the real world it responds with a lag. In other words, firms do not immediately lay off workers in response to a sales decline. They wait a while before responding. Similarly, firms do not immediately hire workers when sales pick

up. What do you think accounts for the lag in response time?

Under what condition would an increase in the unemployment rate be a positive sign?

Would you expect the natural rate of

unemployment to be roughly the same in different countries?

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.

Why do you think that unemployment rates are lower for individuals with more education?
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