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Chapter 21: Q 14. (page 524)

What are some of the problems with using the unemployment rate as an accurate measure of overall joblessness?

Short Answer

Expert verified

This is because there are varied situations arise in the economy overall.

Step by step solution

01

Step 1. Definition

Unemployed is a person who is constantly looking for a job or work and he/she is also capable of doing work but don鈥檛 able to get a job then they are unemployed.

In order to calculate the unemployment rate, the total number of unemployed people is divided by the total number of people in the labor force, which consists of both employed and unemployed people, and then the ratio is expressed as a percentage.

02

Step 2. Explanation

The unemployment rate's main problem is that it doesn鈥檛 include discouraged workers.

Discouraged workers are defined as the workers who have discontinued their looking for a job as they are not finding employment options and failed to be nominated for a job. Because of this they are discouraged and classified under discouraged workers.

03

Step 3. Conclusion

The unemployment rate also doesn鈥檛 include underemployed workers.

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Most popular questions from this chapter

Suppose the adult population over the age of 16 is 237.8 million and the labor force is 153.9 million (of whom 139.1 million are employed). How many people are 鈥渘ot in the labor force?鈥� What are the proportions of employed, unemployed and not in the labor force in the population? Hint: Proportions are percentages.

Over the long term, has the U.S. unemployment rate generally trended up, trended down, or remained at basically the same level?

Would you expect hidden unemployment to be higher, lower, or about the same when the unemployment rate is high, say 10%, versus low, say 4%? Explain.

Is it desirable to eliminate natural unemployment? Why or why not?

Is it desirable to pursue a goal of zero unemployment? Why or why not?
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