Ass 5.8 Essay Example | Topics and Well Written Essays - 1250 words

back tooth 5.8 - Essay ExampleIn say to determine the official unemployment send it is important to determine the heart and soul labor force play. impart labor force = Unemployed work force + employed workers = 8.4 + 108.5 =116.9 Therefore, Unemployment rate= subprogram of unemployed workforce ?100 = 8.4 ? 100 = 7.2% Total Labor force 116.9 The official unemployment in the US in 1991 was = 7.2% 2. If bureau of statistics considered 1.2 million nation as unemployed, the official unemployment rate will be as follows Official Unemployment rate= Number of unemployed workforce ?100 Total Labor force Total labor force = 108.5 + 1.2= 109.7 Official Unemployment rate= (1.2?109.7)100 =1.1% There was a discrepancy of 6.1% obtained by finding the deflection between the two rates of unemployment as follows 7.2%-1.1% =6.1%. The discrepancy may be attributed to an increase in nook and inflation rate leading to a decrease in unemployment rate by 1.6% in the flake answer. 3. The Concept of natural rate of unemployment Natural rate of unemployment refers to the rate of unemployment that occurs in a healthy miserliness when the labor market at equilibrium (Taylor, 2007). At this at this point full employment corresponds with the rate of unemployment. The concept can be presented diagrammatically as shown below. Real Wage ASL N= labor force ADL Natural rate of Unemployment We Q1 Q2 Source Author Natural rate of unemployment include frictional and structural unemployment (Mankiw, 2011). Frictional rate of unemployment occurs when people leave their current channel and went to look for new better and satisfying jobs (Mankiw, 2011). During this period, people may remain unemployed and therefore, an parsimony may experience frictional rate of unemployment (Mankiw, 2011). On the early(a) hand, Structural rate of unemployment occurs when new technological changes leads to unemployment because people do not have the required skills and friendship to do the job and therefo re, people need to be retrained in to dispatch their skills correspond to a job need (Woirol, 1996). Distinguishing between good inflation and bad inflation and why whatsoever economists see some inflation victor than others. Economist asserts that a good inflation refers to the one that creates caution to an economy of an threatening deflation so that an economy can put in place necessary measures to curb impending deflation (Mceachern, 2012). Additionally, a good inflation can helps in real wage adjustment in case of disequilibrium. On the other hand, economist asserts that a bad inflation is the one that has a depressing impact to an economy making the cost of living to be extremely high and unbearable(Mceachern, 2012). A bad inflation tends to make an economy engage itself in borrowing leading to escalating debts. Additionally, wages and income tend to remain low as the cost of living continues to rise (Mceachern, 2012). This situation could lead to strikes and boycotts as w orkers pressures employers to increase their salaries and wages in order to cope with high cost of living (Mceachern, 2012).Some economist hold that hyper inflation as a superior as compared with double digit and moderate inflation. This is because hyper inflation makes the economy to become totally depressed as money in circulation losses value making the cost of living unbearable. Lesson 9 Managing the Economy financial Policy and Its Effects 1 (a).Effects of $20billion tax cut on