Gary, Kevin, and Joshua are three individuals who were previously employed but do not have jobs now. Gary lost his job a year ago
Although he would like to have a job, he has given up looking for one as he thinks there are no suitable jobs available for him. Kevin was working as a finance teacher, but quit his job a few months back to become a stock broker. Ever since he quit his job, he is unable to get a new one, although he is actively seeking. Joshua was employed in a steel mill. He lost his job when the labor union in his mill demanded a hike in wages. Classify the three individuals according to their type of unemployment.
Since Gary previously had a job but has stopped looking for one now, he can be considered a discouraged worker. Discouraged workers are potential workers who have stopped looking for jobs since they think there are none available for them.
Kevin is unemployed because it is taking time for him to find a suitable job. Hence, Kevin can be said to be frictionally unemployed. Such unemployment arises because workers have imperfect information about available jobs and need to engage in a time-consuming process of job search.
Joshua is unemployed because the labor union in his workplace demanded higher wages. When wages are above the market clearing wage, there is a fundamental mismatch between the quantity demanded and quantity supplied of labor. Unemployment caused because of this mismatch is referred to as structural unemployment.
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Suppose the federal budget surplus for the year was $350 billion and the economy was in an economic expansion
If the economy had been at potential GDP, it is estimated that tax revenue would have been $140 billion lower and government spending on transfer payments would have been $50 billion higher. Using these estimates, the cyclically adjusted budget A) deficit was $440 billion. B) deficit was $260 billion. C) surplus was $160 billion. D) surplus was $540 billion.
Ken and Traci are two woodworkers who both make tables and chairs. In one month, Ken can make 3 tables or 18 chairs, whereas Traci can make 8 tables or 24 chairs.. Given this, we know that
a. Ken has an absolute advantage in chairs. b. Ken has a comparative advantage in tables. c. Traci has an absolute advantage in chairs. d. Traci has a comparative advantage in chairs.