How Does It Affect The Actual Unemployment Rate? Essay
a. How would this affect the actual unemployment rate? It would decline, because the labor force would increase while the number of people unemployment would stay unchanged; considering that the actual unemployment rate is equals the number of people unemployed divided by the labor force.
b. How would such a change affect estimates of the natural rate of unemployment? The estimates of the natural rate of unemployment also would be lower.
c. If this computational change were made, would it in any way affect the logic of the short-run and long-run Phillips curve analysis and its implications for policymaking? Why might the government wish to make such a change? Of course, the logic of the shirt-run and the long-run in the Phillips curves would not be altered. The Government might decide to favored active (discretionary) policymaking change were the government feels that those in the military actually hold jobs and for this reason should be counted as employed within the U.S. economy to see a positive inflation rate but a relatively low unemployment rate.
17-2. Make lists of possible factors affecting workers and firms that you believe are likely to influence the natural rate of unemployment. Possible factors that would likely to influence the natural rate of unemployment would be changes in private spending or fiscal and monetary policy actions. Cyclical unemployment because they are observed over the course of nationwide business fluctuations. Frictional…