(solution) Microsoft Word – T11.docx Question 6 [4 marks] Suppose any policy

(solution) Microsoft Word – T11.docx Question 6 [4 marks] Suppose any policy

Microsoft Word – T11.docx

Question 6 [4 marks]

Suppose any policy can be broken down into three stages, identification, implementation and results. Explain why the timing of fiscal policy may be more difficult than the timing of monetary policy.

Question 7 [6 marks]

Suppose 180,000 people are employed, 20,000 people are unemployed, the working- age population is 250,000, and 50,000 people are not in the labour force.

  1. Calculate the unemployment rate.
  2. Calculate the labour force participation rate.
  3. How would the unemployment rate and the labour force participation rate change if discouraged workers were counted as unemployed rather than as being in the ‘not-in-the-labour force’ category?