Class Notes - 10-19-07

Class Notes - 10-19-07 - • Labor Force[LF = E U •...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Macroeconomics – Class Notes – 10/19/07 CHAPTER 15: THE NATURAL RATE OF UNEMPLOYMENT 5-6% average unemployment Natural rate of unemployment is about at least 4% in a normally functioning economy. UNEMPLOYMENT DEFINED Unemployment: o “Lowers living standard, creates anxiety” 2 categories: o Natural Rate of unemployment o Cyclical Rate of unemployment MEASURING UNEMPLOYMENT Adult population [Age 16] Unemployed [ U ] if: o On temporary layoff o Looking for job o Waiting for start of new job NOT IN LABOR FORCE (NLF) Some students Homemaker/housewife/househusband Retirees Discouraged workers (not employed and not actively looking for a job) MEASURING UNEMPLOYMENT Adult Population = [Adults aged 16+] = LF + NLF
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: • Labor Force [LF] = E + U • Unemployment Rate: URate = [(U) / (LF)] * 100 MEASURING UNEMPLOYMENT • Labor-force Participation Rate: o Fraction of population working for pay or looking for work • Labor-force Participation Rate is: o P Rate = (LF / A16+) * 100 o P Rate = (100 million / 120 million) * 100 o P Rate = 83.3% UNEMPLOYMENT RATE MEASUREMENT CORRECT ? • Measured Unemployment rate too LOW due to: o Underemployment (Nuclear physicist working as a steel worker instead [not good] ) o Discouraged workers • Most unemployment: only a few jobless a long time. o Average duration is short (less than 10 weeks) for most unemployed (75% of unemployed)....
View Full Document

{[ snackBarMessage ]}

Page1 / 2

Class Notes - 10-19-07 - • Labor Force[LF = E U •...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online