Mid semester exam due this week today (online by Friday
11.59pm)
1.
a. How is the unemployment rate calculated? What are the three conditions
someone needs to meet to be counted as unemployed?
b. What are the problems in measuring the unemployment rate? In what ways does
the official ABS measure of the unemployment rate understate the true degree
of unemployment? In what ways might the official ABS measure overstate the
true degree of unemployment?
- What would be some general reasons why a firm would lay off a
substantial number of workers?
3
a. Prior to each federal election in Australia, the government always
claims that they have created hundreds of thousands of jobs during
their term of government. Is this claim correct? Briefly explain your
answer.
b. Hundreds of thousands of jobs were eliminated from the Australian
economy in 2016. Does this explain why the unemployment rate also
rose during this year? Explain.
4
a. What are the costs to individuals of being unemployed? Is the cost to society of
unemployment equal to the sum of the costs to the individuals? Why or why
not?
b. In addition to the payment of unemployment benefits, discuss why extra costs
are borne by the federal government during times of rising unemployment.
Sample Solution
