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[The unemployment rate and the business cycle] Go to the Web site of the Federal Reserve Bank of St. Louis (FRED) (research.stlouisfed.org/fred2/).
a. Find the most recent values for these three variables: (1) Unemployed (UNEMPLOY), Civilian Employment (CE16OV), (2) Employment Level - Part-Time for Economic Reasons, All Industries (LNS12032194), and (3) Not in Labor Force, Searched for Work and Available (LNU05026642).
b. Using the values you found in part (a), calculate the official unemployment rate.
c. Some economists argue that the official unemployment rate understates the degree of joblessness in the economy because it uses too narrow a definition of unemployment. The BLS also calculates a broader measure of the unemployment rate, which includes people who work part-time for economic reasons and people who are available for work but not actively searching. Using the data you found in part (a), calculate this broader measure of the unemployment rate.
d. How would you expect the gap between the official rate of unemployment and the broader rate to change over the course of the business cycle?
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