ECONOMISTS talk about four types of unemployment.
A. Define these four types of unemployment. (12 points)
B. Which type of unemployment is associated with recessions? (3 points)
Cyclical
2. The goal of studying and recording the unemployment rate is to learn something about the state of the economy. Explain why each of the following makes the unemployment rate a better or worse indicator of how healthy the economy is.
A. If people in the military aren't included in the labor force, does the unemployment rate become a better or worse indicator of the state of the economy? (3 points)
B. If discouraged workers aren't counted in the labor force, does the unemployment rate become a better or worse indicator of the state of the economy? (3 points)
C. If part-time workers are treated exactly like full-time workers, does the unemployment rate become a better or worse indicator of the state of the economy? (3 points)