question archive 1) If nominal income is $55,000 in the current year and the CPI in the current year is 120, then what does real income equal in the current year? 2
1) If nominal income is $55,000 in the current year and the CPI in the current year is 120, then what does real income equal in the current year? 2
Subject:EconomicsPrice:2.87 Bought7
1) If nominal income is $55,000 in the current year and the CPI in the current year is 120, then what does real income equal in the current year?
2. What is the difference between a person who is frictionally unemployed and one who is structurally unemployed?
3. Six million persons are unemployed, and 60 million persons are employed. If the natural unemployment rate is 5 percent, what does the cyclical unemployment rate equal?
4. How is a discouraged worker different from an unemployed worker?
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Answer:
1] Given:
Nominal income = $55,000
CPI(current year) = $120
Real income = (Nominal income/CPI)*100 = (55,000/120)*100 = 45,833.33
Thus real income equal in the current year is $45,833.33
2]
Difference between a person who is frictionally unemployed and one who is structurally unemployed:
A person who is looking for new job and is temporarily unemployed is referred to as frictionally unemployed.
A person is structurally unemployed not by choice but because of falling growth rate of economy. It occurs when people are willing to work but could not find jobs because of lack of the matching skill required.
3]
Given:
Total number of unemployed = 6 million
Total number of employed = 60 million
Labor force = employed + unemloyed = 60 million + 6 million = 66 million
Unemployment rate = unemployed / labor force
= 6 million / 66 million = 9.09%
Cyclical unemployment rate = unemployment rate - natural unemployment
Cyclical unemployment rate = 9.09% - 5% = 4.09%
Cyclical unemployment rate = 4.09%
4]
4]
|
Unemployed Worker |
Discouraged Worker |
|
1] They are the persons who are categorized from their job due to some reason. as job losers, job leavers, reentrants and new entrants. 2] They are eagerly looking for a job. |
1] They are the persons who are being fired. 2] They are depressed and lose hopes for getting a job again and so stops looking for a job |
