Question

1. Critical Thinking: Assume an economy that has a total population of 290 million people of which 50 million are not eligible to work. Assume the economy has a LFPR of 75% where everyone would like full-time work, but only 130 million people are working full-time and the remainder is engaged in part time work. An evaluation of the rest of the labor force would be broken down as such: a recent recession caused the industrial sector to lay off 30 million workers, half of which are still looking for a job, and half of which became frustrated with their job search and decided to wait for the economy to recover before starting their job search. In addition to that group, 5 million people have been terminated when their industry automated forcing them to look for work, another 3.5 million people are looking for work because their summer job ended, there are 4.5 million people entering the job market for the first time, and 3.5 million that are looking for work in a new job since their employer no longer required their prior skill. Finally, an additional 1million people that are temporarily out of work while they are in the process of changing jobs. (4 points)
   1. If you only counted each type of unemployment separately what is the percent unemployment of the total labor force for each category
      1. Frictional
      2. Seasonal
      3. Structural
      4. Cyclical
   2. Determine this society’s total unemployment rate and natural rate of unemployment
   3. If you also counted all the discouraged workers as unemployed, what would the new total unemployment rate be?

Answer 1

Ans

Can answer only 4 parts according to Chegg policy