General Instructions: Please provide your answers to the following in the spaces provided, and then upload your finished document to WebCampus. Don't forget to save a copy of your document before turning it in.
Each question on this assignment will be assigned point values, for a total of 10 points for this assignment.
1. A country with an adult population of 110 million adults has 70 million employed, 4 million unemployed, and the rest of the adult population is out of the labor force. What's the unemployment rate? What share of the population is in the labor force?
2.If a booming economy encourages some of those people who were previously out of the labor force to enter the labor force, it is possible that the number of jobs and the unemployment rate would rise at the same time. Briefly explain how this is possible.
3.If many workers become discouraged from looking for jobs, briefly explain how the number of jobs could decline but the unemployment rate could fall at the same time.
4.Briefly explain whether each of the following would be counted as "unemployed" in the U.S. government survey.
A) A husband willingly stays home with the children while his wife works
B) The factory closes down where a manufactured worker had currently worked
C) An unpaid internship by a college student
D) A retiree
E) A person who has been out of work for two years but continues looking for a job
F) A person who has been out of work for two months and isn't looking for a job
G) A person who hates their present job and is actively looking for another
H) A college graduate who is taking the summer off before starting their job
5. Explain why each of these theories might make a business reluctant to cut wages for its workers, even under bad economic conditions: implicit contracts, efficiency wage theory, adverse selection of wage cuts, insider-outsider model and relative wage coordination.
6.Why do employers pay attention to the motivation and morale of their employees when they make decisions about setting wages? What implications does your answer have for the likelihood that a business will cut wages?
7. After several years of economic growth, would you expect the unemployment of an economy to be mainly cyclical or mainly due to the natural rate of unemployment? Briefly explain.
8. Unemployment rates have been higher in many European countries in recent decades than in the U.S. Is the main reason for this long-term difference in unemployment rates more likely to be cyclical unemployment or the natural rate of unemployment? Briefly explain.