1. Assume that you are the president of the US, and you have the tools necessary to create higher levels of employment among workers in the US. (A)Identify two methods you might use to decrease the unemployment level in the US. (B)Many members of Congress want you to initiate programs that would eliminate unemployment altogether (0% unemployment rate). Explain why you either would or would not initiate programs to eliminate all unemployment.
2. Assume that you have a job working as a buyer for a major department store. Your salary is $100,000 per year as well as another $15,000 in benefits. The economy slips into a recession and you are laid off. After looking for a similar position with similar pay for several months you finally take a job waiting tables in a local restaurant making $36,000 per year including tips. Obviously this is not the job you wanted but must settle for just to pay basic bills. Once you take this job should you be counted as part of the employed labor force? Explain why or why not taking into account the' discouraged worker' phenomenon.
3. Identify at least 3 changes in the last decade that have caused structural unemployment.
4. The federal and some state governments have recently increased minimum wage requirements. Why might this actually increase unemployment and leave workers worse off?
5. Assume that you are a member of a labor union which has just bargained with your employer to raise everyone's wages by 10% and provide full health coverage. What potential harm could this do to the workforce?
6. The participation of women in the labor force has been on the rise since 1960. Identify 2 specific reasons for this.
7. Identify 3 reasons why the participation rate of men in the work force has been declining since 1960.
8. Part time jobs are attractive to many workers as well as many employers. Explain.
9. If there were 1.5 million people unemployed in Canada with 15.5 million people employed and a population of 20 million, what would the unemployment rate equal? What would be the participation rate? (When calculating, remember that the unemployment rate is calculated upon the number of people in the labor market while the participation rate is calculated upon the entire population- Refer to Checkpoint 15.1, pg. 404).
10. Assume that the government decides to drastically decrease welfare, social security, and unemployment payments. How would this action change the unemployment rate? How would it change the labor participation rate?
11. Look at Figure 15.5, pg. 414. Explain what the author means by the 'output gap' in the 2008-2009 recession.
12. Frictional unemployment is considered to be a "...permanent and healthy phenomenon in a dynamic, growing economy". Identify 3 different causes of frictional unemployment.
13. Susan Sampson lost her job as a bank teller in the early 1970's when automatic teller machines were introduced. Identify and define the type of unemployment this would be.

OMY CHECKPOINT 15.1 Define the unemployment rate and other labor market indicators Practice Problems The BLS reported that in December 2015, the labor force was 157.8 million, an ployment was 149.9 million, and the working-age population was 252.0 million 1. Calculate the unemployment rate and the labor force participation rate 2. The BLS also reported that 18.3 percent of all employment in D in December 2015 was part time and that 6.0 million people worked part time for economic reasons. How many people worked part time for noneconomic reasons? In the News Summer 2015 youth labor market From April to July 2015, the number of employed youth 16 to 24 years old rose by 2.1 million to 20.3 million and youth unemployment increased from 2.1 mil- lion to 2.8 million. In July, the youth labor force grew by 2.8 million to a total of 23.1 million and the youth population was 38.5 million. Source: BLS Press Release, August 18, 2015 How did the youth unemployment rate change from April to July? Calculate the youth labor force participation rate in July. lonng ari to posd s ons bavordo Solutions to Practice Problems 1. The unemployment rate is 5.0 percent. The labor force equals employment plus unemployment. So unemployment equals the labor force minus em- ployment, which equals (157.8 million - 149.9 million), or 7.9 million. The unemployment rate equals unemployment as a percentage of the labor force. Unemployment rate = (7.9 + 157.8) X 100 or 5 percent. The labor force participation rate is 65.5 percent. The labor force participation rate equals the labor force as a percentage of the working-age population. Labor force participation rate = (157.8 + 252.0) X 100, or 62.6 percent. 2. 21.4 million people worked part time for noneconomic reasons. Employment was 149.9 million. Part-time employment was 18.3 percent of 149.9 million, which equals 27.4 million. Given that 6.0 million worked part time for eco- nomic reasons, then 27.4 million minus 6.0 million, or 21.4 million, worked part time for noneconomic reasons. Solution to In the News The unemployment rate is the number unemployed as a percentage of the labor force. The April employment equals the July employment (20.3 million) minus the increase of 2.1 million from April to July, or 18.2 million. The labor force equals employed plus unemployed. The April labor force was (18.2 million + 2.1 million), or 20.3 million. In April, 2.1 million were unemployed, so the April un- employment rate was (2.1 + 20.3) x 100, or 10.3 percent. In July, 2.8 million were unemployed and the labor force was 23.1 million, so the unemployment rate was 12.1 percent. From April to July, the unemployment rate rose from 10.3 percent to 12.1 percent. The July labor force participation rate equals the labor force (23.1 million) as a percentage of the youth population (38.5 million), or 60 percent.ING THE MACROECONOMY FIGURE 15.5 The Relationship Between Unemployment and the Output Gap MyEconLab Real-time data As the unemployment rate fluctuates around the natural unemployment Unemployment rate rate in part (a), the output gap-real (percentage of labor force) . . . . . . . . . . . . . . . . . . . . .1. GDP minus potential GDP expressed 2008-2009 as a percentage of potential 1 1 . . . . . . . .. ... _ 200 recession 981-1982 1990-1991 recession GDP-fluctuates around a zero out- recession recession put gap in part (b) - . . . . . . . . . . . When the unemployment rate 9 . . . . . . . . . . . . . . . . Unemployment exceeds the natural unemployment rate rate, real GDP is below potential GDP and the output gap is negative (the red sections in both parts). 7 . When the unemployment rate is . . . . . . . ... . below the natural unemployment rate, real GDP is above potential GDP and 5 . . . . . . . . . ..... ... . ... . .. the output gap is positive (the blue Natural sections in both parts). unemployment rate 2020 The natural unemployment 3 2000 2005 2010 2015 rate shown in the graph is the 1980 1985 1990 1995 Year Congressional Budget Office's estimate. It might turn out to be an (a) Cyclical and natural unemployment underestimate for the years since 2008. Output gap (percentage of potential GDP) 5 . . . . . . . . 5 . . .. . . . . . . . . 1981-1982 1990-1991 2001 recession 2008-2009 recession -10 recession recession 1980 1985 1990 1995 2000 2005 2010 2015 2020 (b) The output gap Year SOURCES OF DATA: Bureau of Economic Analysis, Bureau of Labor Statistics, and Congressional Budget Office