Question

1- The questions below test your understanding of the concept of unemployment Define the labor force__________________________________________________1pt Give the technical definition of unemployment_______________________________1pt Define the labor force participation rate_____________________________________ 1pt You are given the following data: Total population age 16 and over = 198.6 million Number of people NOT in the labor force = 66.3 million Number of people employed = 124.9 Based on the information above calculate: Size of the labor force______________________________________________________ 1pt The labor force participation rate_____________________________________________1pt Unemployment rate________________________________________________________ 1pt Why does the nation’s published unemployment rate understate the true level of joblessness? ____________________________________________ 2pts 2- Fiscal policy Define fiscal policy______________________________________________________ 1pt What are the goals of fiscal policy?____________________________________________ 1pt What are automatic stabilizers?____________________________________________ 1pt What fiscal policy tools you would use to fight unemployment?__________________ 2pts Which one of those tools would be most effective in fighting unemployment?________ 1pt Give 2 examples of automatic stabilizers and explain how they will work in a recession_ 2pts Using the AD and AS curves, illustrate how fiscal policy will shift the curves and explain the impact on price level and GDP.______________________________________________ 2pts

Answer 1

Answer1: Labour Force means every citizen of the country above the age of 16 whether employed or unemployed.It included people who are currently working and who are searching for job included in labor force .

Answer2 : Unemployment means that person is actively searching for a job but unable to find the job.

Answer 3: Labour Force participation rate is the section of a working population which lies between the age group of 16-64 in the economy has been currently employed or searching a job.

Answer 4: Size of labour force = Total population above the age of 16- people who are not actively searching job

Size of labour force = 198.6million- 66.3 million= 132.3 million

Answer5: Labour Force participation rate=( Labour Force/population)*100= (132.3/198.6)*100= 66.62%

Unemployment rate = (Number of people unemployed/Labour Force)*100= ( 7.4/132.3)*100= 5.59%

Answer 6 : Nation published unemployment rate is less than the jobless unemployment because it is always misleading as low unemployment shows the expansion of an economy and the working of the political party . The main purpose of showing lower unemployment rate means showing expansion in the economy . That is the reason that unemployment rate published is always less than the actual jobless unemployment.

Answer 7 : Fiscal policy is the government policy used the revenue and Taxes collection of the government for the Welfare of an economy .

Answer8: The main goals of fiscal policy are :

• To achieve or maintain higher Economic growth.
• To achieve and maintain full employment rate.
• Stabilize the prices in an economy.