Assignment Instructions/ Description
The metro areas with the lowest and highest unemploymentIn December 2015, Ames, Iowa had the lowest unemployment in the United States at 2.2 percent of the workforce. At the other end of the scale was El Centro, California with 19.6 percent of its workforce unemployed. Source: Forbes, February 9, 2016Fact: the depth of the 2008-2009 recession, the unemployment rate in Ames peaked at 5.7 percent. In El Centro, it peaked at 30.3 percent.Use the information provided to estimate how much of the unemployment in Ames and El Centro in 2009 was cyclical and how much was natural. Explain your assumptions in arriving at your estimates.To estimate the unemployment that is natural, we need to know or make an assumption about _____.A.the source of economy growthB.when the economy is at full employmentYour answer is correct.C.the inflation rate the economy is experiencingD.when the economy is not growingAssuming that the economy was at full employment in December 2015, the natural unemployment rate in Ames is 2.2 percent and in El Centro is 19.6 percent. When unemployment was at its peak level, cyclical unemployment in Ames was 3.5 percent and in El Centro was 10.7 percent.
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