Answer to Question #129493 in Macroeconomics for NN

Question

You are watching national news with your roommate. The news anchor says, “unemployment statistics release by Department of Labor today show an increase in unemployment from 6.1 percent to 6.2 percent. This is the third month in a row where the unemployment rate has increased.” Your roommate says, “Every month there are fewer and fewer people with jobs. I don’t know how much longer the country can continue like this.”
a. Can your roommate’s statement be deduced from the unemployment rate statistic? Why?
(20 marks)
b. What information would you need to determine whether there are really fewer people with jobs?

Answer 1

a) No, based on the information given, the roommate's statement can't be deduced deduced from the unemployment rate statistics, since it only gives the ratio between number of unemployed and labor force but not the absolute value of people who are unemployed.

b) The information needed is the exact number of people who are unemployed to determine whether there are indeed fewer people with jobs.