Multiple choice 14.A 15.A 16.C 17.B 18.D 19.A 20.B 21.C 22.C 23.C 24.B 25.C 26.A 27.D 28.B True or False 3. T 4. F 5. T 6. T Problems 2a. those 15 years of age or older who are either employed or unemployed excluding members of the armed forces, home makers, students, retirees, persons with disabilities, institutionalized persons and discouraged persons. L force = number of employed persons + number of unemployed persons = 10 million 2b. those 15 years of age or older who are without a job but are actively looking for work. U rate = # unemployed x 100 = 1 million x 100 = 10% # L force 10 million Essays 6. Distinguish between structural unemployment and frictional unemployment. - define structural U - provide reason for structural U o because of a change in the structure of the economy due to: technological changes which cause product and process innovation; industrial changes where new industries emerge that do not require skills of those who have been retrenched from declining industries. - define frictional U - provide reason for frictional U o U due to a lack of information 7. Differentiate between the U rate and the participation rate. - define U rate,provide & explain the formula - define L force participation rate, provide & explain the formula 8. What is cyclical U and how is it overcome? - define cyclical U - to overcome – expansionary FP and MP – explain theory only - use deflationary gap diagram to explain 9. Explain ONE reason why the official measurement of unemployment in Australia is said to underestimate the actual unemployment rate. - explain either discouraged workers or underemployed - discouraged workers: o want to work but have given up hope of obtaining employment due to lack of job opportunities and is especially high during recession o not considered as unemployed by ABS because not actively looking for work o as such, will underestimate U rates especially during recession o however during recovery/boom, there are more job opportunities available and more discouraged workers are encouraged to rejoin the L force (hidden unemployed become active job seekers) and as such prevent U rate from falling as fast as it should - underemployed: o those who would like to or can work more hours or where skills are underutilized or there is low productivity o ABS considers people working as little as one hour of paid work per week or at least 15 hours per week as unpaid worker in a family business as being employed o as such, the underemployed are not considered as unemployed by ABS and as such underestimates the U rate 10. Explain the relationship between the concepts of full employment and the natural rate of unemployment. - full employment does not mean 0% unemployment rate - in Aust. there is full employment as long as U between 5% - 6% of the L force - at full employment, the U rate equals the sum of frictional, structural & seasonal unemployment - explain why there will still be unemployment even if the economy s doing very well i.e. at peak - so the unemployment that exist at full employment is known as the natural rate of unemployment or NAIRU 11. Describe some of the costs of U. - define unemployment - explain 3 unemployment costs 12. What relationship does the Phillips curve illustrate? - inflation rate & U rate - shows an inverse r/ship between the two - explain the reason together with the diagram 17. a) Explain what is meant by full employment in Australia - define unemployment, state Aust. U target & current U rate - refer to Q10 - also state: demand side policies such as expansionary fiscal & monetary policy would not reduce the natural rate of unemployment because it is not caused by lack of spending b) Explain how govt. policies could be used to bring Australia closer to full employment today. - fiscal policy – theory and practice - monetary policy – theory &practice - MER – define MER &give 2 examples from labour market reform 18. a) Explain 2 reasons why governments consider a low rate of unemployment an important economic objective - define unemployment, state Aust. U target & current U rate - explain at least 2 problems of unemployment b) What factors might cause a high rate of U in an economy? - define unemployment - explain the reasons based on the type of unemployment: - cyclical U o refer to question 8 - structural U o refer to question 6 on structural unemployment - frictional U o refer to question 6 on frictional unemployment
Posted on: Thu, 19 Sep 2013 14:33:50 +0000