The effect of _____ is to produce an unemployment rate that understates actual unemployment.
a. the underground economy
b. discouraged workers and underemployment
c. the growth in real GDP
d. institutionalized and retired labor force
e. seasonally unemployed workers
Question 2
Who among the following people will an economist consider underemployed?
a. Someone who prefers to spend more time on leisure and less time on wage-earning activities
b. A person who is working part-time at wage-earning activities, but prefers a full-time employment
c. A rock star who voluntarily chooses to work part-time
d. Someone who is in prison and is willing to work from his cell
e. A gardener who hates plants but still does the job because he or she has no other skills
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Consider the production function ( ) 0.5 0.5 Y = AK L . Suppose both saving rate (s) and the ...
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