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Chapter 8: Q 39 (page 215)

Under what condition would an increase in the unemployment rate be a positive sign?

Short Answer

Expert verified

Unemployment rate depicts percentage of individuals unemployed in total labor force.

Step by step solution

01

Step 1. Introduction

Unemployment rates do fluctuate over time. There are different reasons causing unemployment in economy. A condition is said to be positive under two conditions:

02

Step 2. Introduction of new jobs

When a firm or government is doing good and demand of the product is increased. They need to increase their supply so when government or a firm introduces new jobs, opportunities or industries indicate that economy is doing good and shows a positive sign .

03

Step 3. Reentering of discouraged workers

When discouraged workers become hopeful and tart looking for jobs again which will eventually result in decrease of unemployment rate and this unemployment rate is good for economy. This is a positive sign as it is showing reentering of workers in labor, which indicates that more job opportunities are introduced.

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Most popular questions from this chapter

Assess whether the following would be counted as 鈥渦nemployed鈥� in the Current Employment Statistics survey.

a. A husband willingly stays home with children while his wife works.

b. A manufacturing worker whose factory just closed down.

c. A college student doing an unpaid summer internship.

d. A retiree.

e. Someone who has been out of work for two years but keeps looking for a job.

f. Someone who has been out of work for two months but isn鈥檛 looking for a job.

g. Someone who hates her present job and is actively looking for another one.

h. Someone who decides to take a part time job because she could not find a full time position.

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

Are U.S. unemployment rates typically higher, lower, or about the same as unemployment rates in other high-income countries?

What happens to the labor force participation rate when employed individuals are reclassified as unemployed? What happens when they are reclassified as discouraged workers?

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.
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