ec4004 lectures 7 and 8 unemployment

Unemployment

EC4004 Lecture 7Stephen Kinsella

www.stephenkinsella.net

Today

1. Recap2. Capacity Utilisation3. Unemployment

Unemployment

Ireland’s Employment Rate, 1997-2006

[Route] 66 is the path of a people in flight, refugees from dust and shrinking land, from the thunder of tractors and invasion, from the twisting winds that howl up out of Texas, from floods that bring no richness to the land and steal what little richness is there."

––John Steinback, The Grapes of Wrath, Chapter 12, pg. 150

"On the highways the people moved like ants and searched for work, for food. And the anger began to ferment."––Grapes of Wrath, Chapter 21, pg. 363

Equilibrium

The capital utilization rate is:

a.the rate capital wears out in a particular period.

b.the percentage of capital used in production.

c.the depreciation rate.

d. all of the above.

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If the labour force is 100 million, there are 95 million people employed, there are 98 million jobs that employers want occupied, then the unemployment rate is:

a.3%.

b.5.3%.

c.5%.

d.none of the above.

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A decrease in workers’ effective real incomes while unemployed will:

a. lower the job finding rate and raise the expected duration of unemployment.

b. raise the job finding rate and lower the expected duration of unemployment.

c. lower the job finding rate and the expected duration of unemployment.

d. raise the job finding rate and the expected duration of unemployment.

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Next TimeBarro Chapters 10 &11