Suppose we have the following initial data concerning unemployment in the economy: Labor Force: 200 million; Number of people unemployed: 10 million. Now suppose that subsequently 5 million people drop out of the labor force because they are discouraged and cannot find a job. What is the unemployment rate after 5 million people drop out of the labor force?

Suppose we have the following initial data concerning unemployment in the economy: Labor Force: 200 million; Number of people unemployed: 10 million. Now suppose that subsequently 5 million people that were previously out of the labor force, re-enter the labor force and start looking for jobs, because the labor market is improving. What is the unemployment rate after 5 million people re-enter the labor force?

Is the Keynesian preferred measurement of unemployment above or below the official civilian unemployment rate?

Why is the Keynesian preferred measurement of unemployment above or below the official civilian unemployment rate?

During a period where the labor market is healthy we would expect the labor force participation rate to:

The employment-population ratio measures:

During a period where the labor market is unhealthy we would expect the employment-population ratio to:

If productivity growth declines what should happen to the secular growth trend?

Answer the following question based on the following information: Trend Growth Rate: 4%; Unemployment Rate Increase: (+) 3 percentage points. Using Okun’s Rule of Thumb what is the predicted decline in output from its trend growth rate?

Answer the following question based on the following information: Trend Growth Rate: 1%; Output Decline (Fall) Due to Recession: (-) 3%. Using Okun’s Rule of Thumb what is the predicted change in unemployment ?

Given that the trend line is downward sloping, what do we expect to happen to the quarterly change in GDP growth if the quarterly change in the unemployment rate is positive or increasing?

Cyclical unemployment tends to be _______, while structural unemployment tends to be ________.

The problem of cyclical unemployment:

Structural unemployment problems are:

What type of unemployment exists at the target rate of unemployment?

Standard economic theory predicts that the following will happen if the civilian unemployment rate drops below the target rate of unemployment:

Answer the following question based off of the following information: NAIRU or target rate of unemployment= 6%; Civilian unemployment rate= 3%. Given the following information what action would an economist at the Federal Reserve recommend that the Federal Reserve engage in?

If structural unemployment was the main cause of unemployment in the economy what would we expect to observe in the economy?