1. Classify each of the types of unemployment described below as frictional, structural, or cyclical. Give a brief explanation of your characterization.
a) With the overall national unemployment rate at under 4%, hundreds of laid-off computer programmers cannot find new programming jobs.
b) A rise in oil prices brought about by a crisis in the Persian Gulf raises costs of production and reduces profits of U.S. manufactures and other firms which use inputs made from imported oil. The ensuing decline in business investment results in a recession, raising the unemployment rate from 4.5% to 9.5% over 18 months.
c)With the Massachusetts economy expanding and the Commonwealth's unemployment rate down to 2.5%, the state's only auto plant shuts down, idling 1,000 workers in Framingham. These workers had been employed at the plant for an average of 20 years, and as a result, had developed specialized skills which cannot readily be transferred to other occupations and industries.
2.Suppose, in April the number of employed stood at 137.7 million while the number of unemployed stood at 8.8 million. What was the unemployment rate in April?
3. In June there are 30,000 people classified as unemployed and the size of the labour force is 600,000. The only change between June and July is that 10,000 people give up looking for work. Compute the unemployment rate in July.
1. Classify each of the types of unemployment described below as frictional, structural, or cyclical. Give a brief explanation of your characterization.
a) With the overall national unemployment rate at under 4%, hundreds of laid-off computer programmers cannot find new programming jobs.
b) A rise in oil prices brought about by a crisis in the Persian Gulf raises costs of production and reduces profits of U.S. manufactures and other firms which use inputs made from imported oil. The ensuing decline in business investment results in a recession, raising the unemployment rate from 4.5% to 9.5% over 18 months.
c)With the Massachusetts economy expanding and the Commonwealth's unemployment rate down to 2.5%, the state's only auto plant shuts down, idling 1,000 workers in Framingham. These workers had been employed at the plant for an average of 20 years, and as a result, had developed specialized skills which cannot readily be transferred to other occupations and industries.
2.Suppose, in April the number of employed stood at 137.7 million while the number of unemployed stood at 8.8 million. What was the unemployment rate in April?
3. In June there are 30,000 people classified as unemployed and the size of the labour force is 600,000. The only change between June and July is that 10,000 people give up looking for work. Compute the unemployment rate in July.
