Aplia Homework: Macroeconomic Measurements, Part I: Prices and Unemployment Due

Question

Aplia Homework: Macroeconomic Measurements, Part I: Prices and Unemployment Due on Jan 21 at 11:59 PM PST 8. Discouraged workers Which of the following statements correctly describe discouraged workers? Check all that apply O They are counted as partially employed by the Bureau of Labor Statistics. They are employed workers who are looking for better positions elsewhere. The y have searched for a job sometime within the last 12 months but have now stopped looking O They are the people who did 1 5 hours of unpaid work in a family-operated enterprise. The following table contains employment information for the United States from May 2 Clvilian, Noninstitutionalized Adult Population (Number of people) 233,405,000 Employed (Number of people) 146,046,000 Unemployed (Number of people) 8,487,000 Discouraged (Number of people) 400,000 The Bureau of Labor Statistics (BLS) calculates the official unemployment rate using the following formula Unemployment Rate aalinnhrTr A- JavascriptonClickProblemSetiteml/af/servlet/quiz?quiz_action-takeQuiz&quiz;

Explanation / Answer

Discouraged workers - They have searched for a job sometime within last 12 months but now have stopped looking.

When official unemployment rate doesn't account for discouraged workers . Then, civilian labor force = (total employed +total unemployed workers) = (146,046,000 + 8,487,000) = 154,533,000.

And unemployed workers = 8,487,000.

Now, if discouraged workers is to be included , the total number of unemployed workers = (8,487,000 + 400,000) = 8,887,000 . And civilian labor force = (154,533,000 + 400,000) = 154,933,000.

Official unemployment rate is when discouraged workers not included = unemployed workers/ civilian labor force

= (8,487,000/ 154,533,000) 100%

= 0.054(100%) = 5.49%

Unemployment rate with discouraged workers = (8,887,000/ 154,933,000)100%

= 0.057(100%) = 5.7%

Based on the calculation above, if the BLS were to include discouraged workers in the official unemployment rate, the reported unmployment rate would increase as we can see above i.e 5.7%.

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