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Unformatted text preview: JAN-ZB-ZOO'? 15:16
P . 01/02 Carleton University
Department of Economics Tutorial Assignment 2
Groups 1. 3. 5. 7. 9. 11. Instructor: [1. Smith __ __.__ __________.._.. _ manger.’9;oo% n economy does not have zero percent unemployment when it has full 1. Explain why a
employment. ing information about an economy: working—age population - 20 2. Consider the follow
million; full-time employment — 8 million; part-time employment — 2 million (1 million of whom wish they had full-time jobs): unemployment — 1 million. a. What is the labour force in this economy? What is the labour force participation rate? b. What is the unemployment rate?
0. What is the involuntary part-time rate? d. What is the employment-to-population ratio? e. If 0.6 million of those unemployed are frictionally. structurally and seasonally
unemployed. what is the natural rate of unemployment? f. What is the amount of cyclical unemployment? 3. Consider the labour demand and supply schedules for an economy in Table 31.1. ’/ Table 31.1 Labour Demand Labour Supply Real Wage
Rate (constant dollars (millions of workers) (millions of workers) per hour)
32 8 3 (D 4 23 12
5 24 16
a 20 20
7 16 24
a - 12 28
. r a- 32 JAN—23—2007 15:16
P.02/02 33. if the natural rate of unemployment is 10 percent. calculate the labour force and the number unemployed in equilibrium. falls by 4 million workers at each wage rate from
s are sticky. calculate the resulting cyclical
t rate alter the change. b. Suppose that labour demand the equilibrium in (a). If wage
unemployment and total unemploymen rds are not money. 43. Explain why credit ca
reate new money during the deposit Carefully explain how and why banks c multiplier process.
5a. What is national saving? What is private saving? What is public saving? How are these three variables related? What is investment? How is it related to national saving? c. What is a government budget deﬁcit? How does it affect interest
investment, and economic growth? rates. Note: Use symbols to illustrate your answers to this question. LMiOVlgl ASEM nmmi‘ +12;
int/13006} L31) .7 ill. TOTAL" ‘P .13;sz ‘ ...
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- Fall '11