ECON 214 Problem Set 2 solutions complete answers

ECON 214 Problem Set 2 solutions complete answers 

 

Just put your values given and automatically provide answers for you!

 

Question 1

 

Classify each of the following unemployment situations as either cyclical, frictional, or structural unemployment.

 

Michael is temporarily out of work. He quit his job at Citibank to find another job as a financial analyst.
Mary graduated from college with an economics degree. She doesn’t have a job yet, but she has six interviews lined up.
A data-entry employee loses his job because it was permanently outsourced to India.
Paul lost his job six months ago. His employment counselor at the labor office advises him to retrain.
In 2011, Borders Books filed for bankruptcy, and 19,000 employees lost their jobs.
Unemployment in Michigan increased as consumer demand for automobiles fell during the Great Recession.
Large numbers of construction workers lost their jobs after the collapse of the housing bubble.
 

Question 2

 

Please read the article below, and use the information in the article to answer the following question.

 

What’s Really Wrong with the Unemployment Rate by Justin Fox

 

Here is a quote from the article: "Instead, these nonemployed workers tend to be those who have been left behind by the economic changes of the last generation. Their jobs have been replaced by technology or have gone overseas, and they can no longer find work that pays as well." Which type of unemployment does this quote describe?

 

Question 3

 

The table below reports labor market data in the United States in June 2009 (the end of the last recession) and June 2016. The numbers are reported in millions of people. Use the information in the table to answer the questions below. Enter your answers to two decimal places. 

 

Part 1

 

From June 2009 to June 2016, the unemployment rate fell from       % to       %.

 

Part 2

 

If discouraged workers were included, the unemployment rate would have been       % in June 2009 and       % in June 2016.

 

Part 3

 

From June 2009 to June 2016, the labor force participation rate fell from       % to       %.

 

Question 4

 

You have been asked by the king of the small island nation of Littleston to present the labor force data listed below.

 

Using this data, calculate the number of unemployed people, the unemployment rate, and the labor force participation rate.

 

Enter your answers in the table below. (Give all answers to two decimals.)

 

Question 5

 

Which of the following people are structurally unemployed? Select all answer options that apply.

 

A newspaper photographer loses his job due to decreased circulation of the physical newspaper. His boss says more people are using the Internet to get their news.
A seasonal drought causes some farm workers to lose their jobs. There just isn’t enough work for them to do.
Your mechanic closes his shop because recent advances in technology mean that cars need much less servicing, and he doesn’t have enough work to keep the business open.
Two employees of a tax accounting firm are laid off because new tax software has made it easier for people to do their own taxes.
A teacher at the local high school loses his job when declining enrollment causes the school district to consolidate schools.
A worker on an assembly line loses her job when the company outsources jobs to China.
 

Question 6

 

You have been hired to determine if unemployment is running too high. First you must determine the natural rate of unemployment. You have been provided the data in the table below.

 

Using the data above, determine the natural rate of unemployment.

 

Question 7

 

Below is data on the natural rate of unemployment and actual unemployment.

 

The information provided above reflects an economy that is       .

 

Question 8

 

Which of the following situations would be considered frictional unemployment?

 

A town is devastated when a slow global economy causes the local auto manufacturer to close its factory.
 A worker in a textile factory loses her job when manufacturing is mechanized.
A recent college graduate takes a month off to travel while deciding between two job offers.
A software development firm finds the perfect employee, but it waits to hire her because government regulations require the government to consider other candidates before the firm makes a job offer.
A worker with ten years of experience in finance gets laid off. He has rejected three job offers because they are below his skill level.
 

Question 9

 

Of the people described below, who would be counted as unemployed?

 

a student who quit college to look for a modeling job in New York
an able-bodied 53-year-old who took an early retirement package from her employer
a second lieutenant in the U.S. Army
a 17-year-old single parent who has just been laid off and is looking for a new job
a newly graduated Ph.D. who could not find a teaching job and is driving a taxi
a full-time college student who plans to look for a job after graduation
a 55-year-old steel worker who was laid off 18 months ago and has given up trying to find a job
 

Question 10

 

Which of the following situations would be considered cyclical unemployment?

 

A recent college graduate cannot find a job anywhere, despite excellent qualifications. The news media report that there are not enough jobs to go around in the economy.
A friend is taking a trip around the world while she waits for another job offer. She has been offered six jobs but has not accepted any of them.
A typewriter repair shop closes, citing lack of business. The owner is quoted as saying, “We haven’t had a customer in weeks. It has something to do with people using computers.”
A friend wins the lottery and quits working. He says he will never work again.
A college instructor’s contract is not renewed because more people are taking online classes and the college does not need as many classroom instructors.
A worker on the assembly line at Ford is laid off due to a drop in car sales brought on by a weak economy.
 

Question 11

 

Data on the natural rate of unemployment and actual employment are provided in the table below.

 

Based on these numbers, the amount of cyclical unemployment in the economy is       .

 

Question 12

 

Imagine you have spent a year searching for a job and have become discouraged. In the last six weeks, you have not looked for work. When numerous people are in the same situation as you, all else being equal, the unemployment rate       .

 

Question 13

 

Which of the following would help reduce the amount of frictional unemployment?

 

government policies to limit outsourcing of jobs
interviewing a wide variety of candidates to ensure a diverse workforce
government policies to help promote a stagnant economy
Websites that advertise job openings across the country
providing tax breaks to firms that engage in technological innovations
 

Question 14

 

Which of the following would lead to a lower unemployment rate?

 

unemployment benefits are reduced from 26 weeks to 20 weeks
advances in technology allow computers to accurately process billing records
a large number of job seekers get discouraged and stop looking for work
the economy enters a recession
a new company hires 1,000 college graduates
 

Question 15

 

Part 1

 

Use the table below to answer the question.

 

The unemployment rate is (give your answer to two decimals):

 

Part 2

 

If 4 million of those who are currently unemployed become discouraged workers, the unemployment rate will       .  

 

The unemployment rate is now        (give your answer to two decimals).

 

Question 16

 

Refer to the table above. What is the labor force participation rate for this economy? (Round to the nearest one-tenth of a percent.)