Week+6+-+Ch28 - Chapter 28 Unemployment and its Natural...

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Chapter 28 Unemployment and its Natural Rate Suggested solution Questions for Review 1. Labor statisticians categorize each adult (16 years of age and older) as either employed, unemployed, or not in the labor force. The labor force consists of the sum of the employed and the unemployed. The unemployment rate is the percentage of the labor force that is unemployed. The labor-force participation rate is the percentage of the total adult population that is in the labor force. 3. Frictional unemployment is inevitable because the economy is always changing. Some firms are shrinking while others are expanding. Some regions are experiencing faster growth than other regions. Transitions of workers between firms and between regions are accompanied by temporary unemployment. The government could help to reduce the amount of frictional unemployment by public policies that provide information about job vacancies in order to match workers
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