3. Dismuraged workers and involuntary part-time workers Simply counting the number of unemployed workers will not necessarily give the Bureau of Labor Statistics (EELS) the most accurate indication of the extent of underemployment in the economy. Some part-time workers will be counted as employed even if they'd like to work full-time. Furthermore, some jobless workers will not qualify as unemployed because they have given up on theirjob search, frustiated with their inability to nd work. Fortunately, the ElLS can use the information provided in the household survey to classify workers in ways that account for these types of underemployment. The ElLS classies those who work part-time because they cannot nd full-time employment as involuntary part-time workers. The EELS classifies as discouraged workers those who want and are available for work but have not searched for employment during the previous four weeks because they believe their job search is currently futile. By keeping track of discouiaged and involuntary parttime workers, the EELS gets a clearer picture of underemployment than if it looked only at the number of unemployed workers. Which of the following statements correctly describe discouraged workers? Check all boat apply. |:| They have not looked for work during the past four weeks. |:| They are available for work. : They are not in the labor force. : They are parttime workers who want to work fulltime. Consider a hypothetical economy in which the labor force consists of 250 people. Of those, 230 people are employed fulltime and 20 people are unemployed. The economy follows the same conventions as the US. Bureau of Labor Statistics [BLS] in computing its employment gures. Therefore, initially the unemployment rate is calculated as follows: Member qrrrealpfrl_\\'ed People \"*IMPFDIWMRW - IllMW " 100 = MXIOCI 250 = 8% Suppose a reduction in foreign demand for this economy's products causes an economic recessiona prolonged period of declining output. The following table offers two possible scenarios resulting from the recession. Calculate the unemployment rate associated with each scenario in the following table. Assume that each scenario describes the only labor market changes in this economy. Scenario Unemployment Rate A: Firms reduce work hours by 30%. The number of involuntary part-time workers rises % as firms respond to the reduction in the demand for their products by reducing the hours of each employed person from 40 to 28 hours per week. B: Firms reduce employment by 30%. The number of unemployed workers rises as firms % respond to the reduction in the demand for their products by laying off 69 previously employed workers. True or False: The unemployment rate for scenario A in the previous table overstates the true extent of underemployment in the economy because the BLS counts part-time workers as employed. O True O FalseLatasha's paycheck each week is $12 per hour times the number of hours she works. Latasha thus currently earns a wage of $12 per hour. Suppose the price of orange juice is $3 per gallon. The amount of orange juice she can buy with her paycheck is of orange juice, which represents her wage. When workers and firms negotiate compensation packages, they have expectations about the price level (and changes in the price level) and agree on wage with those expectations in mind. If the price level turns out to be higher than expected, a worker's wage is than both the worker and employer expected when they agreed to the wage. Suppose that Latasha and her employer both expected inflation to be 3% between 2011 and 2012. They signed a two-year contract stipulating that Latasha would earn $12 per hour in 2011 and $12.36 per hour in 2012. However, actual inflation between 2011 and 2012 turned out to be 5% rather than the expected 3%. For example, suppose the price of orange juice rose from $3 per gallon to $3.15 per gallon. This means that between 2011 and 2012, Latasha's nominal wage by , and her real wage by approximately