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Chapter 6_ Monitoring Cycles Jobs Price

Chapter 6_ Monitoring Cycles Jobs Price - MONITORING CYCLES...

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MONITORING CYCLES, JOBS, AND THE PRICE LEVEL 6 CHAPTER
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Objectives After studying this chapter, you will able to Explain how we date business cycles Define the unemployment rate, the labor force participation rate, the employment-to-population ratio, and aggregate hours Describe the sources of unemployment, its duration, the groups most affected by it, and how it fluctuates over a business cycle Explain how we measure the price level and the inflation rate using the CPI
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Vital Signs A recession started in March 2001 and ended in November 2001. What defines a recession, who makes the decision that we are in one, and how? How do we measure unemployment and what other data do we use to monitor the labor market? Being employed alone does not determine standard of living; the cost of living also matters, so we also need to know what the Consumer Price Index is, and how that is measured and used.
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The Business Cycle The business cycle is the periodic but irregular up- and-down movement in production and jobs. The NBER defines the phases and turning points of the business cycle as follows: A recession is a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income, and wholesale-retail trade. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough . Between trough and peak, the economy is in an expansion .
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The Business Cycle Business Cycle Dates Figure 22.1 shows the percentage change in real GDP over each cycle between 1928 and 2003.
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The Business Cycle The 2001 Recession The 2001 recession was one of the mildest recession on record. But the recovery from that recession was unusually slow and weak—a jobless recovery.
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Jobs and Wages Population Survey The U.S. Census Bureau conducts monthly surveys to determine the status of the labor force in the United States. The population is divided into two groups: The working-age population —the number of people aged 16 years and older who are not in jail, hospital, or other institution. People too young to work (less than 16 years of age) or in institutional care.
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Jobs and Wages The working-age population is divided into two groups: People in the labor force People not in the labor force The labor force is the sum of employed and unemployed workers.
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Jobs and Wages To be considered unemployed, a person must be: without work and have made specific efforts to find a job within the past four weeks, or waiting to be called back to a job from which he or she was laid off, or waiting to start a new job within 30 days.
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Jobs and Wages Figure 22.2 shows the population labor force categories for 2003.
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Jobs and Wages Three Labor Market Indicators The unemployment rate is the percentage of the labor force that is unemployed.
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