Consider the following scenario. Initially the economy has 90 million people working, 10 million people unemployed, and 20 million people not in the labor force. Then prospects for the economy improve
Five million people who previously were not in the labor force now join the 10 million previously unemployed in looking for work. For now, the economy remains with 90 million workers. What happens to the unemployment rate?
The unemployment rate rises from 10.0 percent, (10 million unemployed) ÷ (100 million labor force) × 100, to 14.3 percent, (15 million unemployed) ÷ (105 million labor force) × 100.
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Suppose that the inflation rate has been 3 percent per year for several years, and the unemployment rate has been stable at 5 percent. Unanticipated changes in government policy cause the inflation rate to increase to 6 percent
In the short run, we would expect the unemployment rate to A) increase, but the exact amount cannot be known for sure. B) decrease. C) increase to 10 percent. D) remain constant.
A graph shows the wage rate of factory workers. The slope of the line is positive for periods when the wage rate is
A) low and falling. B) high and not changing. C) rising. D) high and falling. E) falling.
Which of the following is not correct?
a. Frictional unemployment is inevitable in a dynamic economy. b. Although the unemployment created by sectoral shifts is unfortunate, in the long run such changes lead to higher productivity and higher living standards. c. The internet can help facilitate the job search and reduce frictional unemployment. d. Unemployment insurance decreases frictional unemployment.
A typical economic good has which one of the following characteristics?
A. The desired quantity exceeds the quantity available at a zero price. B. It is never scarce. C. It uses no resources to produce. D. The quantity available exceeds the desired quantity at a zero price.