Macroeconomics UNEMPLOYMENT 1610

7/24/2019 Macroeconomics UNEMPLOYMENT 1610

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CHAP

TER 5

Prepared by: Fernando Quijanand Yvonn Quijan

2004 Prentice Hall Business Publishing Principles of Economics, 7/e Karl ase, !a" #air

Prepared b

Mr. Eduard R.

Macroeconomics

Unemployment


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2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air

&pening Pra"er

Our Father, You bestow upon us your infinite Grace. We are grateful for your perpetual kindnes

Please shower us with wisdom as we gotodays lesson.

We ask this through esus !hrist. "men.


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'ocabular" (rill

Explain the 3 Strains of Inflati


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!e)ie*

Causes and Impacts of Inflati


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E+itorial artoon nal"sis


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.ntro+uction

During the recession that began in 2007, the

unemployed people in the United States rosthan 4 million.

Of the 11 million unemployed people at the e

half !ere "#ob losers,$ people !ho lost

in%oluntarily. During the &reat Depression, the unemplo

rose much more, reaching an all'time high of

in 1)**.


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Emplo"e+ )s nemplo"e

+eople !ho perform any paid !or, a

those !ho ha%e #obs but are absent fbecause of illness, stries, or %acations.

+ersons !ho do not ha%e a #ob, ha%

looed for !or in the prior 4 !eescurrently a%ailable for !or.

Unemployment rate - umber of un

di%ided by the labor force.


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n+eremplo"e+

+eople !ho are compelled to !or shor

than they !ould lie to. Disguised Underemployment /idden Unemployment +rematurely etired


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(isguise+ n+eremplo"me

tric used by some countries in orde

do!n unemployment statistics.

orers are hired for the sae of disguunemployed as employed.


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Prematurel" !etire+

practice mostly obser%ed in go

institutions. 5he go%ernment may as some people t

an earlier age to gi%e !ay to the youn

!ho are seeing employment.


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&3uns a*

States that for e%ery 2 percent that

relati%e to potential &D+, the unemploy

rises about 1 percentage point. +ro%ides the %ital lin bet!een the output

the labor maret. Describes the association bet!een

mo%ements in eal &D+ and ch

unemployment.


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.nformal 6ector

6onsists of ha!ers, street %endors,store o!ners, pedicab dri%ers, etc.

usually self'employed.

+ro%ides cheaper sources of food, gser%ices for the formal sector. Ser%es as an important support group for

sector of the economy.


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Euilibrium nemplo"men

rises !hen people become unemployed %

as they mo%e from #ob to #ob or into and

labor force. Sometimes called frictional unemploymen

people cannot mo%e instantaneously bet! !orer at a 247 con%enience store might

the pay is too lo!, or the hours are too incon%

8uit to loo for a better #ob.


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(iseuilibrium nemplo"me

Occurs !hen the labor maret macroeconomy is not functioning pro

some 8ualified people !ho are !illing t

the going !age cannot find #obs. Sometimes called "in%olutarily unemplo

Structural unemployment 6yclical unemployment


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6tructural nemplo"men

Signifies a mismatch bet!een the suppthe demand for !orers. n acute shortage of nurses arose rece

number of silled nurses gre! slo!ly

demand for nursing care gre! rapidly becaging population.

ot until nurses9 salary rose rapidly and

ad#usted did the structural shortage of nurs


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"clical nemplo"ment

:;ists !hen the o%erall demand declines in business'cycle do!nturns.


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Economic .mpact

hen the unemployment rate goes up, the

is in effect thro!ing a!ay the goods andthat the unemployed !orers could ha%e p

5he largest economic loss occurred d

&reat Depression. 3= 2.7)> 5 est. 5he oil and inflation crises of the 1)70s

also generated more than a trillion dolla

output. 3= 1.>)4 5 est.


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6ocial .mpact

o dollar figure can ade8uately co

human and psychological toll of long p

persistent in%oluntary unemployment. 5he personal tragedy of unemployment

pro%ed again and again.


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8reat (epression 96an #ranc


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!ecollection of annemplo"e+ onstruction ;or

< called the roofing outfits and they didn9t need me b

already had men that had been !oring for themyears. 5here !asn9t that many openings. ?ou ha

college education for most of them. nd < !as

anything, from car !ash to anything else. So !hat d

dayA ?ou go home and you sit. nd you begin to gsitting home. :%erybody in the household starts

edge. 5hey start arguing !ith each other o%er s

Bcause they9re all cramped in that space all the time

family ind of got crushed by it.

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Macroeconomics UNEMPLOYMENT 1610