Question

Please read the following articles and offer a response in terms of personal experience and what you have learned in this course thus far. 

http://www.theatlantic.com/magazine/archive/2009/07/home-economics/7490/


I recognize the above Atlantic article is now several years old but for many of us, the reality of the 'Great Recession' lingers on. Adjusted for inflation, the income of the top 1 percent rose 31 percent from 2009 to 2012, but the real income of the bottom 40 percent actually fell 6 percent. So I expect this article will have relevance for many in class.

Below is a link to an article that appeared in the New York Times early in 2014 that further illustrates this divide. The post-recession reality is that the customer base for businesses that appeal to the middle class is shrinking as the top tier pulls even further away.

http://www.nytimes.com/2014/02/03/business/the-middle- class-is- steadily- eroding-just- ask-the- business-world.html?_r=0

More recently (Sept 2016), an article that highlights how uneven the recently described “rebounding economy” has been experienced by many Americans: “While the economy finally is moving in the right direction, the real incomes of most American households still are smaller than in the late 1990s”. The recent “surprise” result of the 2016 Presidential election is undoubtedly tied to the perception of many voters that they have been forgotten and are being left behind.

http://www.nytimes.com/2016/09/15/business/economy/census-poverty- income- donald-trump.html

And this past Spring, "Fed Officials Worry the Economy Is Too Good. Workers Still Feel Left Behind."

https://www.nytimes.com/2018/04/26/us/politics/fed-economy-overheating.html

Answer 1

Answer-

Either increases or decreases , but we don't know for sure.

labor force participation rate = labor force / total number of people eligible to participate in the labor force.

A number of factors effect the labor force participation rate such as discouraged workers leaving the labor force, increase in eligable people.Hence we can not be sure.

2) Option A

decreases;decreases

The decrease in the labor force participation rate means the quantity of labor supplied is decreased which will decrease the potential GDP and real wage rate.