14) a) equilibrium wage rate- $10 employment-100% size of labor force- 50,000 unemployment rate- 0% b) level of unemployment- 66% size of labor force- 60,000 unemployment rate- 33%
c) level of employment- 43% size of labor force- 70,000 employment rate- 57% d) level of employment- 25% size of labor force- 80,000 unemployment rate- 75% 15) 2007 2008 Change Northeast 26665.7 26684.7 19 South 51902.9 52300.1 397.2 Midwest 33106.1 33177.8 71.7 West 33643.8 33988.9 345.1 b) Northeast 172.1 South 670.1 Midwest 224.3 West 671.5 c) Northeast 4.3 4.8 South 4.2 4.7 Midwest 4.9 5.3 West 4.5 5.3 d) In all four regions, the increase in unemployment was due to the decrease in the amount of jobs available. 16) a) There is no need for an efficiency wage because the boss will be present to observe Jane. b) There is a chance that the boss will pay an efficiency wage because it will motivate Jane to do a good job without supervision. c) There is a chance that the boss will pay Jane an efficiency wage because she has special skills, and the efficiency wage will keep Jane motivated to work for him.
17) a) people will spend less time looking for jobs (frictional unemployment) which will reduce the natural rate of unemployment b) less frictional unemployment and therefore lower natural rates of unemployment c) less frictional unemployment because jobs can now be found faster, so now, natural unemployment is lower. d) less structural unemployment, and therefore a lower rate of unemployment. 18) a) The job-for-life system caused a very low level of frictional unemployment, and since the system broke down, the unemployment increased. b) The increase of the GDP indicates a lower unemployment rate. THe likely cause of the change in unemployment is a decrease in cyclical unemployment. 19) Mortgages would be especially attractive in about 1995 because at this point in time, the inflation rate was much higher than the interest rate, which would mean that the borrower would have to pay the lender back with money of less purchasing power. 20) a) Zimbabwe, Turkey, Indonesia, Brazil, United States, France, China, Japan b)Zimbabwe, Indonesia, China, Japan, Brazil, France, U.S, Turkey c)Japan’s borrowers gained because the value of the money was lower than expected
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