Suggested answers to selected Review Questions: (Ch 8) 1.4 Working-age population 95,237,037 Employment 51,428,000 Unemployment 5,714,222 Unemployment rate 10% Labor force 57,142,222 Labor force participation rate 60% 1.8 This law would persuade more men between the ages of 25 and 54 to stay in the labor force. As more of these men would join the labor force, their measured income and the country’s GDP would rise. This should make society as a whole better off because people can now consume the goods and services that these men would produce. However, these men would not necessarily be better off as a result of the policy. Presumably, many of these men are currently choosing not to be in the labor force, probably because they value their leisure time more highly than they value the income they could earn by working. Forcing them into the labor force may reduce their well-being. 2.3 During a recession, jobs are less plentiful and the chances of getting a high-wage job offer are lower. This means that the opportunity cost of attending graduate school is lower so that new
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