I. Explore the recent business cycle that ended in Feb. 2020.
a. When did the expansion begin?
b. How does its longevity compare to historical cycles?
c. Are there any forecasts or other indicators of when the cycle will turn?
II. Define and provide examples of the three categories of unemployment (cyclical, structural
and frictional).
III. In the context of the recent business cycle and current state of the labor market explain or
develop the following concepts:
a. Working age population and the demographic impact: For example, age demographics and
gender participation
b. What determines the changes in the Labor Force?
c. How has Labor Force participation changed over the last decade?
d. The linkage between labor force participation and the growth in real GDP
IV. The unemployment rate was 3.5% in January 2020. Now it is 6.2% (Feb. 2021). Is the
number representative of the current labor market condition: why or why not?
V. Is unemployment evenly distributed across society? Who are the winners and losers?
Sample Solution