Question

7. Problems and Applications Q2 Indicate what happens to the unemployment rate and the labor-force participation rate in each of the following scenarios. Scenario Effect On... Unemployment Rate Labor-Force Participation Rate After a long search, Jon finds a job. Tyrion, a full-time college student, graduates and is immediately employed. After an unsuccessful job search, Arya gives up looking and retires. Daenerys quits her job to become a stay-at-home mom. Sansa has a birthday, becomes an adult, but has no interest in working. Jaime has a birthday, becomes an adult, and starts looking for a job. Cersei dies while enjoying retirement. Jorah dies working long hours at the office.

Answer 1

Answer:

The Unemployment rate refers to people in the economy who are actively looking for work but are jobless.

The Labor-force participation rate refers to the percentage of the working age population who are active in the workforce. This includes both employed and unemployed people as unemployed people are actively seeking jobs.

1. After a long search, Jon finds a job.

Unemployment rate - Decrease

Labor-force Participation rate - Same

2. Tyrion, a full-time college student, graduates and is immediately employed.

Unemployment rate - Decrease

Labor-force Participation rate - Increase

3. After an unsuccessful job search, Arya gives up looking and retires.

Unemployment rate - Decrease

Labor-force Participation rate - Decrease

4. Daenerys quits her job to become a stay-at-home mom.

Unemployment rate - Increase

Labor-force Participation rate - Decrease

5. Sansa has a birthday, becomes an adult, but has no interest in working.

Unemployment rate - Same

Labor-force Participation rate - Decreases

6. Jaime has a birthday, becomes an adult, and starts looking for a job.

Unemployment rate - Increase

Labor-force Participation rate - Increase

7. Cersei dies while enjoying retirement.

Unemployment rate - Same

Labor-force Participation rate - Increase

8. Jorah dies working long hours at the office.

Unemployment rate - Increases

Labor-force Participation rate - Decrease