Unit III Principles of Macroeconomics Homework and Essay
7 Questions and 1 Eaasy
7-1 Describe what the unemployment rate measures, and summarize four sources of employment
2. (Measuring Unemployment) Suppose that the U.S. noninstitutional adult population is 230 million and the force participation rate is 67 percent.
a. What would be the size of the U.S. labor force?
b. If 85 million adults are not working, what is the unemployment rate?
3. (Types of Unemloyment) Determine whether each of the following would be considered frictional, structural, seasonal, or cyclical unemployment:
a. A UPS employee hired for the Christmas season is laid off after Christmas.
b. A worker is laid off due to reduced aggregate demand in the economy.
c. A worker in a DVD rental store becomes unemployed as video-on-demand cable service becomes more popular.
d. A new college graduate is looking for employment.
7-2 Outline the pros and cons of unemployment insurance
5. (The Meaning of Full Employment) When the economy is at full employment, is the unemployment rate at zero percent? Why or why not? How
would a more generous unemployment insurance system affect the full employment figure?
7-3 Define inflation and describe the two sources of inflation
7. (Inflation) Here are some recent data on the U.S. consumer price index:
Year CPI Year CPI Year CPI
1992 140.3 1999 166.6 2006 201.6
1993 144.5 2000 172.2 2007 207.3
1994 148.2 2001 177.1 2008 215.3
1995 152.4 2002 179.9 2009 214.5
1996 156.9 2003 184.0 2010 218.1
1997 160.5 2004 188.9 2011 224.9
1998 163.0 2005 195.3 2012 229.6
Compute the inflation rate for each year 1993-2012 and determine which were years of inflation. In which years did deflation occur? In which years
did disinflation occur? Was there hyperinflation in any year?
8-1 Describe how we measure labor productivity, and explain why is it important for a nation’s standard of living
1. (Measuring Labor Productivity) How do we measure labor productivity? How do changes in labor productivity affect the U.S. standard of living?
8-2 Summarize the history of U.S. labor productivity changes since World War II and explain why these changes matter
5. (Long-Term Productivity Growth) Suppose that two nations start out in 2013 with identical levels of output per work hour—- say, $100 per hour.
In the first nation, labor productivity grows by 1 percent per year. In the second, it grows 2 percent per year. Use a calculator or a spreadsheet to
determine how much output per hour each nation will be producing 20 years later, assuming that labor productivity growth rates do not change.
Then, determine how much each will be producing per hour 100 years later. What do your results tell you about the effects of small differences in
productivity growth rates?
8-3 Evaluate the evidence that technological change increases the unemployment rate
7. (Technological Change and Unemployment) What are some examples, other than those given in the chapter, of technological change that has
caused unemployment? And what are some examples of new technologies that have created jobs? How do you think you might measure the net
impact of technological change on overall employment and GDP in the United States?
Your completed Homework assignment should be at least three to four pages in length. All sources used, including the textbook, must be referenced;
paraphrased and quoted material must have accompanying citations. All references and citations used must be in APA style.
Unit IV Essay
Write a minimum of a five-page essay, using proper APA format, on the topic of unemployment in the U.S. Use a minimum of three scholarly sources. You
have the freedom to take any aspect of unemployment that you desire to research.
All sources used, including the textbook, must be referenced; paraphrased and quoted material must have accompanying citations. All references and
citations used must be in APA style.
