Question: In May 2018, the U.S. unemployment rate fell to 3.8 percent, its lowest level in 18 years. An unemployment rate this low is often viewed as being very good for the economy, so explain how this low unemployment rate benefits the economy in terms of the following:

  • productivity and GDP growth
  • wages and wage growth
  • consumer confidence
  • labor supply & demand
  • entitlement spending

An unemployment rate this low can also be viewed as being detrimental to the economy, so explain how this low unemployment rate may also damage the economy in terms of the following:

  • productivity and GDP growth
  • employee loyalty
  • potential inflation
  • labor supply & demand

Answer: Unemployment is the state in which skilled individuals are actively looking for a job, remain out of work for more than four weeks…….

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