The Bureau of Labor Statistics counts as employed people who work part-time, but would prefer to work full-time. Suppose the people who had part-time jobs, but wanted full-time jobs, were counted as unemployed. Explain how the unemployment rate and the
labor force participation rate would change.
What will be an ideal response?
The unemployment rate would increase and the labor force participation rate would stay the same. The number of unemployed would rise, but the labor force would stay the same. The part-time workers who wanted to be full-time workers would simply go from being employed to unemployed. With no change in the labor force, the labor force participation rate would not change.
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
Refer to Figure 8.3. What is marginal cost when output is 200 units?
A. $9
B. $2500
C. $8.62
D. $7.77
Inflation reduces the ability of money to function as a
A) medium of exchange. B) medium of value. C) unit of account. D) store of value.
Suppose that you have noticed that almost all of the car dealers in your city are located along a three-block stretch of the same street. A likely reason for this clustering of car dealers is that:
A. each dealer is attempting to locate closest to the customers. B. each dealer sells a different brand of car, so they are not competitors and do not have to be concerned about the other dealers' locations. C. there is a social norm in that city that dealers follow in choosing location. D. the dealers are better able to form a cartel.