Assume that a high proportion of recent college graduates decides to stay in school seeking advanced degrees, rather than confront the challenge of landing a good job in the midst of generally high unemployment
What is the direct impact of this behavior on (a) the labor force participation rate, (b) the employment ratio, and (c) the unemployment rate?
The decision to stay in school makes the labor force smaller than it would be otherwise, so the labor force participation rate is reduced. Fewer employed persons lowers the employment ratio. If all of these individuals would have been counted as unemployed, then the decline in the number of unemployed equals the decrease in the labor force. The percentage decrease in the number of unemployed would then be greater than the percentage decrease in the labor force, so the unemployment rate is reduced. However, to the extent that some of those who stay in school would, otherwise, have found a job, the size of the decline in the unemployment rate is small.
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The figure above shows the production possibilities frontier for a country. In order for it to produce at point E, the
A) country would need to acquire more resources and/or more advanced technology. B) production of compact cars would need to decrease. C) production of SUVs would need to decrease. D) country would need to use its resources more efficiently. E) country would need to determine that compact cars and SUVs are equally important to it.
If a change in tastes is in favor of a commodity, that will mean a:
a. Movement down the demand curve b. Movement up the demand curve c. Shift in the whole demand curve to the left d. Shift in the whole demand curve to the right