Macroeconomic

PAGE 592/ Question 2:

 A financial crisis can lead to a recession when production decreases, which means that companies do not need workers. If workers are not needed, unemployment increases. Less work means less income and less income means less spending. These things must happen for at least 6 months for the economy to be in recession

a little invention lead to a major expansion because it is necessary to produce the product and therefore companies need workers to work, so that unemployment decreases. When more people go to work, there is more income and with more income there is more spending.

QUESTION 3/

The labor force is such the majority of the population who are able and willing to work. The bureau of Labor Statistic establish it.

Page 592 Discussion Questions 4/

 How, in general, do unemployment rates vary by race and eth-nicity, gender, occupation, and education? Why does the aver-age length of time people are unemployed rise during a recession?

Unemployment rates vary according to people' skills first which skills depend of the education of the person and the percentage show that a lot of black or hispanic people stop school earlier than white or asian people. Black or Hispanic for example have significantly more chance to be unemployed because of their lack of accession to the education, training and face constant discrimination. Workers who are less educated have higher unemployment rates than educated people bevause of their occupation are more vulnerable to layoff. During a recession a business has more difficulty to pay their employees due to less income because of recession. Less income but the same amount to pay to employees means an unemployed rise during the recession.

REVIEW QUESTION 10 /

True or False: Lenders are helped by unanticipated inflation.

YES

Problems 2/

  Assume the following data for a country: total population, 500; population under 16 years of age or institutionalized, 120; not in labor force, 150; unemployed, 23; part-time workers looking for full-time jobs, 10. What is the size of the labor force? What is the official unemployment rate? The size of the labor force is 500 - 120 - 150 = 230. The official unemployment rate is (23/230)*100 = 10%

Problems 5/

How long would it take for the price level to double if inflation persisted at (a) 2 percent per year, (b) 5 percent per year, and (c) 10 percent per year?

a) By using seventy's rule: 70/2 = 35 years

b) 70/5 = 14 years

c) 70/10 = 7 years

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