Question

1-In April 2014, there were 9.8 million people unemployed in the U.S. and 145.7 million employed. Together, the employed and the unemployed make up the labor force of 155.5 million. The unemployment rate was? Provide the formula and the calculation.

ANS:

2-If 2 million people are unemployed and 8 million are employed, the unemployment rate is: PROVIDE THE CALCULATION

1. 2%.
2. 20%.
3. 25%.

ANS:

3- What are the types of unemployment?   Define and justify.

ANS:

Answer 1

1. Unemployment rate is the percentage of labour force that is unemployed. Labour force includes the number of people who are working and who are unemployed. In the given example the total labour force is 145.7 million employed + 9.8 million unemployed =155.5 million.

Then the unemployment rate = number of unemployed/labour force= 9.8/155.5 ×100=6.30

Answer: The unemployment rate in April 2014 was 6.30%

2. The labour force is unemployed + employed = 2 million+ 8 million=10 million.

The unemployment rate is = number of unemployed/ labour force×100= 2 million/10 million ×100= 2/10=2×100=20%.

Answer: b. 20%

3. The unemployment that generally found in an economy can be classified into the following categories.

1. Voluntary unemployment.

Voluntary unemployment is a type of unemployment where the people are not ready to work at the prevailing wage rate even if work is available.

2. Involuntary unemployment.

It is a situation where people are ready to work at the prevailing wage rate but could not find job.

3. Structural unemployment.

This type of unemployment occurs when there is a structural change in the economy. The change from ancient agrarian economy to most modern industrial economy results in this type of unemployment.

4. Disguised unemployment.

When more people are engaged in job than actually required, it is called disguised unemployment. The marginal product of the labour is zero because they are in excess of the labour required for the productive activity.

5. Underemployment.

This is an unemployment situation which occurs when people are partially employed.

6. Open unemployment.

It exists when people are ready to work but are not working due to the non-availability of work.

7. Seasonal unemployment.

The unemployment cause by seasonal change of production is called seasonal unemployment. For example in agriculture sector the people get employment only during agricultural season. Other times they are unemployed.

8. Cyclical unemployment.

The unemployment caused by business cycle is known as cyclical unemployment. During boom, people get employment while in recession they loss their employment.

9. Technological unemployment.

The introduction of new technology cause unemployment as the workers are unskilled and lacks training to suit the new technology.

10. Frictional unemployment.

This is a temporary unemployment which occurs when people move from one occupation to another.