Submit Quiz is Question: 4 pts 3 of 20 (17 complete) This Quiz: 40 pts possibl D
ID: 1149795 • Letter: S
Question
Submit Quiz is Question: 4 pts 3 of 20 (17 complete) This Quiz: 40 pts possibl During the course of a year, the labor force consists of the same 1,090 people. Of these, 22 lack skills that employers desire and hence remain unemployed throughout the year. At the same time, every month during the year, 31 different people become unemployed, and 31 other different people who were unemployed find jobs. There is no cyclical unemployment a. Calculate the frictional unemployment rate. 96. (Enter your response as a percentage rounded to two decimal places). theunemployment rate.%. b. Calculate Enter your response as a percentage rounded to two decimal places). c. Suppose that a system of unemployment compensation is established. Each month, 31 new people (not including the 22 lacking required skills) continue to become unemployed, but each monthly group of newly unemployed now takes two months to find a job. Calculate the frictional unemployment rate after this change. (Enter your response as a percentage rounded to two decimal places) d. After the change discussed in part (c), calculate the unemployment rate. Enter your response as a percentage rounded to two decimal places). Enter your answer in each of the answer boxes. delete 7 0Explanation / Answer
(a)
Labor force = 1,090 people
Those who are unemployed because they do not have employer-required skills are said to be structurally unemployed.
Structurally unemployed = 22 people
There is no cyclical unemployment. So, all other unemployed people are frictionally unemployed.
Frictionally unemployed = 31 people.
Calculate the frictional unemployment rate -
Frictional unemployment rate = [Frictionally unemployed/Labor force] * 100 = [31/1,090] * 100 = 2.84%
The frictional unemployment rate is 2.84 percent.
(b)
Unemployed = Structurally unemployed + Frictionally unemployed = 31 people + 22 people = 53 people
Calculate the unemployment rate -
Unemployment rate = [Unemployed/Labor force] * 100 = [53/1,090] * 100 = 4.86%
The unemployment rate is 4.86 percent.
(c)
It has been stated that each monthly group of newly unemployed now takes two months to find a job.
This means at a given point of time, there are 62 frictionally unemplpoyed persons.
Calculate the frictional unemployment rate -
Frictional unemployment rate = [Frictionally unemployed after chage/Labor force] * 100 = [62/1,090] * 100 = 5.69%
The frictional unemployment after change is 5.69%.
(d)
Unemployed after change = Frictionally unemployed after change + Structural unemployed = 62 + 22 = 84 people
Calculate the unemployment rate -
Unemployment rate = [Unemployed after change/Labor force] * 100 = [84/1,090] * 100 = 7.71%
The unemployment rate after change is 7.71 percent.