11 . Problems and Applications Q5

Economists use labor-market data to evaluate how well an economy is using its most valuable resourceits people. Two closely watched statistics are the unemployment rate and the employment-population ratio (calculated as the percentage of the adult population that is employed).

Indicate what happens to the unemployment rate and the employment-population ratio in each of the following scenarios.

Scenario	Effect On...
Unemployment Rate	Employment-Population Ratio
An auto company goes bankrupt and lays off its workers, who immediately start looking for new jobs.
After a long search, some laid-off workers find new jobs.
As a result of an economic boom, many students drop out of school and start working as soon as they become adults.
A stock market boom induces newly enriched 60-year-old workers to take early retirement.