Macroeconomics (Fourth Edition)
Macroeconomics (Fourth Edition)
4th Edition
ISBN: 9780393603767
Author: Charles I. Jones
Publisher: W. W. Norton & Company
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Chapter 7, Problem 1RQ
To determine

Explain the US employment population ratio.

Expert Solution & Answer
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Explanation of Solution

The US experiences an increase in the employment population ratio. This general rise in employment population results by a drastic increase in the number of women arriving in the labor market. In the last recession, employment-to-population ratio had fallen from 62.8 percentage to 58.4 percent (from 2008 to 2013), which means that there is a 4.4 percent of decrease in the employment-to-population ratio. This decline represents that about 10.5 million jobs vanished from the labor market.

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Economists use labour-market data to evaluate how well an economy is using its most valuable resource— its people. Two closely watched statistics are the unemployment rate and the employment-population ratio. Explain what happens to each of these in the following scenarios. In your opinion, which statistic is the more meaningful gauge of how well the economy is doing? a. An auto company goes bankrupt and lays off its workers, who immediately start looking for new jobs. b. After an unsuccessful search, some of the laid-off workers quit looking for new jobs. c. Numerous students graduate from college but cannot find work. d. Numerous students graduate from college and immediately begin new jobs. e. A stock market boom induces newly enriched 60-year-old workers to take early retirement. f. Advances in healthcare prolong the life of many retirees
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