Microsoft Word - Solution-Chapter-5

Microsoft Word - Solution-Chapter-5 - Chapter 22 1 The...

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C h a p t e r 2 2 1. The Bureau of Labor Statistics reported the following data for the second quarter of 2008: Labor force: 154,294,000 Employment: 146,089,000 Working-age population: 233,410,000 Calculate for that month the a. Unemployment rate. Unemployment rate is 5.3 percent. The unemployment rate is the percentage of the labor force that is unemployed. The labor force is the sum of the people unemployed and the people employed. So the number of people who are unemployed is 154,294,000 minus 146,089,000, which is 8,205,000. The unemployment rate equals (the number of people unemployed divided by the labor force) multiplied by 100. That is, (8,205,000/154,294,000) 100, which is 5.3 percent. b. Labor force participation rate. The labor force participation rate is 66.1 percent. The labor force participation rate is the percentage of the working-age population that is in the labor force. The working-age population is 233,410,000 and the labor force is 154,294,000, so the labor force participation rate equals (154,294,000/233,410,000) 100, which equals 66.1 percent. c. Employment-to-population ratio. The employment-to-population ratio is 62.6 percent. The employment-to-population ratio is the percentage of the people of working age who have jobs. The employment-to-population ratio is equal to the number of people employed divided by the working-age population all multiplied by 100. The employment-to-population ratio is (146,089,000/233,410,000) 100, which is 62.6 percent. 2. In March 2007, the U.S. unemployment rate was 4.4 percent. In August 2008, the unemployment rate was 6.1 percent. Use this information to predict what happened between March 2007 and August 2008 to the numbers of a. Job losers and job leavers. The number of job losers probably increased and the number of job leavers probably did not change much. The rise in the unemployment
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rate is an indication that the economy was slowing and potentially entering a recession. Normally, in a slowing economy the number of job losers increases but the number of job leavers does not change much. b. Entrants and reentrants into the labor force. Labor force entrants and reentrants probably increased because their changes tend to be in the same direction as the changes in job losers. And in a slowing, recessionary prone economy, job losers definitely increased. 3. In July 2009, in the economy of Sandy Island, 10,000 people were employed, 1,000 were unemployed, and 5,000 were not in the labor force. During August 2009, 80 people lost their jobs and didn’t look for new ones, 20 people quit their jobs and retired, 150 people were hired or recalled, 50 people withdrew from the labor force, and 40 people entered or reentered the labor force. Calculate for July 2009 a. The unemployment rate. The unemployment rate in July is 9.1 percent. The unemployment
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This note was uploaded on 09/14/2011 for the course ECON 103 taught by Professor Gispy during the Spring '11 term at Prairie State College .

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Microsoft Word - Solution-Chapter-5 - Chapter 22 1 The...

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