Carefully define the unemployment rate. How is it possible for the unemployment
ID: 2438973 • Letter: C
Question
Carefully define the unemployment rate. How is it possible for the unemployment rate to fall while the number of new jobs also falls? How is it possible that unemployment falls as the total hours worked falls? Carefully define the unemployment rate. How is it possible for the unemployment rate to fall while the number of new jobs also falls? How is it possible that unemployment falls as the total hours worked falls? Carefully define the unemployment rate. How is it possible for the unemployment rate to fall while the number of new jobs also falls? How is it possible that unemployment falls as the total hours worked falls?Explanation / Answer
Unemployment is a situation when a person is willing to work but cant find any suitable job for him to work. And unemployment rate is the measure of such prevalence of joblessness in the economy. It is calculated by dividing the number of unemployed people in the economy by the total labour force of the economy.
Falling unemployment rate doesnt necessarily mean increasing jobs. It is possible for unemployment rate to fall while number of new jobs also falls. Suppose when population increase is less than the new jobs. Both labour force and unemployed people would decrease which may lead to decline in unemployment rate. And it is quite possible that unemployment falls as the total hours worked also falls. Suppose on increasing employees in a company, existing employees need not to work over time, it is also poosible that after some age people start working less so working hours has fall but unemployment rate has also decreased. Reasons for these are-