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The Unemployment Rate

The Unemployment Rate - services The unemployment rate in...

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The Unemployment Rate: The unemployment rate is the percentage of the labour force not working at any given time Labour force consists of people who are either employed or who are willing and able to work and actively seeking employment Full Employment o Many would think that full employment means an unemployment rate of zero o This will not theoretically happen because structural and frictional unemployment will always exist o In Canada, it is considered “full” when the unemployment rate is in the range of 6-7% o Also known as the natural rate of unemployment o As unemployment rate increase transfer payments increase o Also lost tax revenues o GDP would decrease because people are spending less on goods and
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Unformatted text preview: services The unemployment rate in Canada in 1999 was 6.8% The unemployment rate in Canada in 2008 was 6.3% The unemployment rate in the US in 1999 was 4.3% The unemployment rate in the US in 2008 was 6.7% CPI: • Task of measuring inflation is the responsibility of Statistics Canada • Uses a tool called CPI • Measures the changes of prices in consumer goods • Uses a “representative basket” and monitors the consumption of goods and services and from this information determines the spending habits of households • The primary use of the CPI is to calculate the inflation rate • Inflations Rate = (CPI year 2 – CPI year 1) / CPI year 1 x 100%...
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