Critical Thinking: According to the discussion on shifts in the natural rate of unemployment on page...

Critical Thinking: According to the discussion on shifts in the natural rate of unemployment on page 332, how might the rapid aging of the US population over the next 20 years or so affect the natural rate of unemployment?

Expert Solution

The rapid aging of the US population over the next 20 years or so will affect the natural rate of unemployment demographically because of the elders that are going to retire or the baby boomers and making more jobs available to people coming out of college because there will be more people retired, therefore more jobs available.Overall, the unemployment rate will be low. On the other hand, it is becoming harder and harder for people to retire because of our economy. So if the aging population doesn’t retire when they are suppose to, then there wont be any jobs available for future employees.

As baby boomers retire, more of them should vacate spots in the workplace, but as they get older they'll need more services like health care. That might create more jobs as well.

This will affect the natural rate of unemployment demographically because of the elders that are going toretire or the baby boomers.This can create more unemployment because many are leaving the workfieldbut each year people longevity is getting longer and this can create more jobs service in the health field.This may decrease unemployment.

Rahul Sunny answered 2 years ago

The natural rate of unemployment is the unemployment rate at which the inflation rate has no...

The natural rate of unemployment is the unemployment rate at which the inflation rate has no tendency to increase or decrease. However, the natural rate of unemployment is not fixed. What causes changes in the natural rate of unemployment? Which of the following will not cause the natural rate of unemployment to change? A. Many previous periods with high rates of unemployment. B. Changes in the money supply resulting from monetary policy. C. Changes in labor market institutions. D. Changes...

The US unemployment rate (actual unemployment, u) is 8.4 percent, while the natural rate of unemployment...

The US unemployment rate (actual unemployment, u) is 8.4 percent, while the natural rate of unemployment (nru) is 4.4 percent. (i) Using Okun's Law, compute the US current percentage GDP gap. Show your computation. (ii) State your answer in words, comparing actual to potential output. (iii) Is the US GDP gap positive or negative—and why? Note: "Okun’s Law Arthur Okun was the first macroeconomist to quantify the inverse relationship between the actual unemployment rate and the GDP gap. He noticed...

Suppose you are told that the current unemployment rate is above the natural unemployment rate by...

Suppose you are told that the current unemployment rate is above the natural unemployment rate by two percentage points. (a) Based on the information above, is there any Cyclical unemployment in the economy? Yes or No? Please explain your answer. (b) Describe our current economic condition. Include in your answer our current position on our Production Possibilities Frontier.

Natural Rate of Unemployment #2 a) An economy has had an unemployment rate of 10% for...

Natural Rate of Unemployment #2 a) An economy has had an unemployment rate of 10% for a very long time. 18% of all unemployed workers find a job every month. What share of workers lose their job every month? b) An economy has had an unemployment rate of 5% for a very long time. 3% of all employed workers lose their job every month. What share of unemployed find jobs every month? Natural Rate of Unemployment #3 a) An economy...

If the natural rate of unemployment equals 4 percent and the actual rate of unemployment equals...

If the natural rate of unemployment equals 4 percent and the actual rate of unemployment equals 6 percent, then cyclical unemployment equals: Multiple Choice −2 percent. 10 percent. 2 percent. 6 percent.

The current unemployment rate is 6 percent. If the natural rate of unemployment is 5.5 percent,...

The current unemployment rate is 6 percent. If the natural rate of unemployment is 5.5 percent, then A. the economy is at full employment. B. there is cyclical unemployment equal to 0.5 percent of the labor force. C. there is frictional and structural unemployment equal to 0.5 percent of the labor force. D. there is cyclical unemployment equal to 5 percent of the labor force. Which of the following groups will have their real income reduced if inflation is greater...

Explain the significance of the natural rate of unemployment within the context of unemployment.

Explain the different types of unemployment and their relationship to the natural rate of unemployment and...

Explain the different types of unemployment and their relationship to the natural rate of unemployment and full employment. Include in your analysis the three key indicators that describe the state of the labor market of an economy.

The official unemployment rate in this country has been below the natural rate of unemployment (4.5%)...

The official unemployment rate in this country has been below the natural rate of unemployment (4.5%) for eleven months, which would ordinarily put pressure on wages and create inflation. Yet, the average earnings for nonfarm private employees has only increased by 2.6%, which is marginally better than the inflation rate of 2.13% in the same year. Identify and analyze factors that may explain why high employment rates have not resulted in a very tight labor market.

What is the natural rate of unemployment? Explain how the different types of unemployment that are...

What is the natural rate of unemployment? Explain how the different types of unemployment that are included in such rate differ from each other.

Question