Chapter Questions
What happened to the duration of unemployment during the $2008 / 2009$ recession and what is the likely reason? $(L O 33-1)$
During the past few recessions, government ran expansionary policies, but the duration of unemployment has risen. What does this suggest about the change in structural unemployment over this time period?
If unemployment rises by 2 percentage points, what will likely happen to output in the United Statesrelative to its growth trend? (Use Okun's rule of thumb.) $(\operatorname{LO} 33-2)$
Categorize each of the following as cyclical or structural unemployment: $(L O 33-2)$a. An autoworker is laid off during a recession until car sales pick up.b. A steelworker loses his job because steel is now produced in foreign countries with lower wages.c. A compositor loses her job because the work is now outsourced to India.d. An unemployed person turns down job offers that do not pay the wages of his previous job.
What is a reservation wage and how is it related to structural unemployment? $(L O 33-2)$
Name four reasons why the target rate of unemployment has increased over the past 40 years. $\quad(L O 33-2)$
Why does the concept of unemployment involve normative judgments? $(L O 33-3)$
Will someone who believes that unemployment is an individual's responsibility believe that the current measure of unemployment over- or underestimates the level of unemployment? Explain. $\quad(L O 33-3)$
College degrees are usually associated with higher wages. Does that association mean that what one learns in college increases college students' productivity? $($ LO33-3 $)$
Since a jobs program puts people to work, would it impose costs on society? $(L O 33-4)$
How does the safety net in the proposed guaranteed jobs program differ from the current safety net? $(L O 33-4)$
In what ways would the guaranteed jobs program outlined in the text be more expensive if it provided useful jobs for society? $(L O 33-4)$
Why does the author suggest that students be ineligible for the guaranteed jobs program even though many students are in need? $\quad$ (LO33-4)