Question 1

Identify both the factors that can increase structural unemployment and the policies that can decrease it.

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Question 2

Table: Demographic Data $$\begin{array} { l c } 
\hline \text { Overall population } & \mathbf { 6 0 0 } \text { million } \
\hline \text { Population } 65 \text { years or older } & 82 \text { million } \
\text { Population younger than } 16 \text { years } & 71 \text { million } \
\text { Unemployed persons } & 20 \text { million } \
\text { Employed persons } & 330 \text { million } \
\text { Discouraged workers } & 25 \text { million } \
\hline
\end{array}$$ 
Refer to the table. Use these data to calculate the total labor force, the labor force participation rate, and the unemployment rate.

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Question 3

What factors might increase structural unemployment and what factors might decrease structural unemployment in a given country?

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Question 4

If the adult population is 200 million, and 100 million are working and 10 million are actively looking for a job, but not working, what is the unemployment rate? What is the labor force participation rate?

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Question 5

Explain the impact of discouraged workers on the official unemployment rate.

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Question 6

Most economists argue against increases in the minimum wage as a way to help the poor. Explain why most economists do not favor increases in the minimum wage to raise the living standards of low-income households.

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Question 7

What are the different types of unemployment? Which type of unemployment is most likely to be higher during a recession? Explain your answers briefly.

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Question 8

The natural unemployment rates run higher for European countries than the United States. Briefly discuss some of the major reasons.

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Question 9

Why would the unemployment rate likely understate the overall decline in an economy's performance, especially in a recession?

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Question 10

What would you expect to happen to the unemployment rate during a recession? How about the natural rate of unemployment?

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Question 11

How do wage and employment regulations in Western Europe regarding unemployment benefits, minimum wages, and labor unions differ from those in the United States? How do those differences impact the rigidity of employment index?

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Question 12

Identify the effects of employment protection laws.

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Question 13

If Congress passes legislation making it more difficult for firms to fire workers, how will this legislation affect the nation's level of unemployment? (An example might be a law requiring severance pay for fired workers.) Explain.

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Question 14

If the number of unemployed workers is 9.5 million and the number of employed workers is 146 million, what is the unemployment rate?

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Question 15

If the government wanted to encourage workers over age 60 to retire in order to free up jobs for younger workers, what are two examples of policies that could help to encourage early retirement? Would encouraging older workers to retire be beneficial to the younger workers? Explain.

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Question 16

Table: Statistics for a Small Economy $$\begin{array} { l c } 
\hline \text { Type of statistic } & \text { Number (millions) } \
\hline \text { Population under the age of } 16 & 16 \
\text { Population over the age of } 16 & 54 \
\text { Retirees } & 14 \
\text { Discouraged workers } & 3 \
\text { Frictionally unemployed } & 1.5 \
\text { Structurally unemployed } & 2.5 \
\text { Cyclically unemployed } & 6 \
\hline
\end{array}$$ 
Refer to the table to answer the following questions. 
A) How many people are in the country's labor force?
B) What is the labor force participation rate?
C) What is the unemployment rate?
D) What is the natural unemployment rate?
E) What is the rate of cyclical unemployment?

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Question 17

A nation has an adult population of 30 million people. There are 20 million employed people and 5 million people looking for work. What is the unemployment rate? What is the labor force participation rate?

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Question 18

Explain the impact of unemployment benefits on the unemployment rate.

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Question 19

Discuss the major economic factors that explain the rising labor force participation rate of women after World War II.

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Quiz 11: Unemployment and Labor Force Participation