ECON102_SCHULZE_4

ECON102_SCHULZE_4 - #4 1:21:00 PM Long Run Short Run...

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#4 03/03/2007 13:21:00 and Inflation Output Growth The growth rate of the output of the entire economy Per-Capita Output Growth The growth rate of output per person in the economy Productivity Growth The growth rate of output per worker Short Run: Recessions, Depressions and Unemployment Recession Roughly, a period in which real GDP declines for at least two consecutive  quarters.  Marked by falling output and rising unemployment. Depression A prolonged and deep recession.  The precise definitions of prolonged and  deep are debatable. Defining and Measuring Unemployment    
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Employed Any person 16 years or older (1) who works for pay, either for someone else  or in his/her own business for one or more hours/week (2) who works without  pay for 15 or more hours/week in a family enterprise (3)who has a job but has  been temporarily absent with or without pay Unemployed A person 16 years or older who is not working, is available for work, and has  made specific efforts to find work during the previous four weeks Not in the Labor Force A person who is not looking for work, because he/she does not want to work  or has given up looking Labor Force The number of people employed plus the number unemployed Labor Force = employed + unemployed Population = Labor Force + Not in Labor Force Unemployment Rate The ratio of the number of people unemployed to the total number of people  in the labor force Labor Force Participation Rate The ratio of the labor force to the total population 16 years or older
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*There are large differences in unemployment rates across demographic groups *The national unemployment rate does not tell the whole story.  A low national  rate of unemployment does not mean that the entire nation is growing and producing at  the same rate. Discouraged Worker Effect     the decline in the measured unemployment rate that results when people who  want to work but cannot find jobs grow discouraged and stop looking, thus  dropping out of the ranks of the unemployed and the labor force. The Cost of Unemployment     Some Unemployment is Inevitable When we consider the various costs of unemployment, it is useful to  categorize unemployment in three areas o Frictional Unemployment o Structural Unemployment o Cyclical Unemployment Frictional Unemployment The portion of unemployment that is due to the normal working of the labor 
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ECON102_SCHULZE_4 - #4 1:21:00 PM Long Run Short Run...

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