The Bureau of Labor Statistics reported the data in the table above for October 2003
a) Calculate the number of people unemployed.
b) Calculate the number of people who are not in the labor force
c) Calculate the unemployment rate.
d) Calculate the labor force participation rate.
a) The labor force is the sum of the number of people employed plus the number of unemployed. So the number of people unemployed is the labor force minus the number of employed: 146.8 - 138.0 = 8.8 million.
b) The number of people who are not in the labor force is the difference between the working age population and the labor force: 222.0 - 146.8 = 75.2 million.
c) The unemployment rate is the number of unemployed as a percentage of the labor force: (8.8/146.8 ) × 100 = 6.0 percent.
d) The labor force participation rate is the percentage of the working-age population who are in the labor force: (146.8/222.0 ) × 100 = 66.1 percent.
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There is a temporary adverse supply shock. Given the effects of this shock, if the central bank chooses to return unemployment closer to its previous rate it would
a. raise the rate at which it increases the money supply. In the long run this will shift the short-run Phillips curve right. b. raise the rate at which it increases the money supply. In the long run this will shift the short-run Phillips curve left. c. reduce the rate at which it increases the money supply. In the long run this will shift the short-run Phillips curve right. d. reduce the rate at which it increases the money supply. In the long run this will shift the short-run Phillips curve left.
Suppose a profit-maximizing firm in a perfectly competitive market is earning an economic profit of $1,345. If the firm's fixed cost increases from $200 to $300, the firm will:
A. earn a smaller profit. B. reduce its output. C. earn a greater profit. D. raise its price.