Economics 12Inflation & Unemployment

Ms. Park

Krystal

Next Presenters

- Why is inflation more common than deflation?

Reveiw

◦actual inflation > anticipated inflation Borrowers win◦actual inflation < anticipated inflation Lenders win◦actual inflation = anticipated inflation No one affected

DO NOT CONFUSE INFLATION WITH INTEREST RATE!!!

Real interest rate= nominal interest rate – inflation rate

Borrowing & Lending

Labor force population: all residents of Canada 15 years of age and over, expect those living in Northwest, Nunavut and Yukon Territories, on First Nations reserves, and in institutions (jails and psychiatric hospitals), and full-time members of armed forces.

Labor force: all people who either have a job or are actively seeking employment

Participation rate = labor force/ labor force population

This shows % of population participating in the labor market

Unemployment

Labor force can be divided into those who are employed and those are unemployed.

Unemployment rate = unemployment in labor force/ labor force

Note the % is out of labor force, only those who either have a job or looking for a job, not the whole population.

Unemployment Cont.

In 2010, Canada’s total population was 32 million. Out this population, 25 million were considered part of labor force population. The labor force constituted 70% of labor force population. Out of the labor force, 3 million people were unemployed.

a) How many people were in labor force? b) What was the employment rate?

Example

Question 6 & Exit Slip

Questions- Due Today