economics (test3) (Autosaved)

economics (test3) (Autosaved) - TODAYS MENU Wednesday 21...

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TODAY’S MENU: Wednesday 21 October 2009 A. Economic Growth 1. Definition : Produce more goods ad services in a period then the past - The market value of final goods and services produces in an economy, stated in the prices of a given year ` 2. Measure: Gross Domestic Product (GDP) = % change in GDP 3. Major Issue: Fluctuations over time: not the same from one period to the next a. Long Run: Changes in Productivity - output /worker /hour b. Short Run: Business Cycle -Fluctuations c. Recession- Neg EG Depression- Pos EG Expansion- Long Recession d. Example: Productivity (“procyclical”) – With the business cycle - Productivity growth rates - Interest Rates Countercyclical: against the business cycle B. Unemployment: The Basics 1. Definitions a. Unemployment Rate: 9.8% in 2009 b. Labor Force Participation Rate (LFPR)- % = LF/working age pop. X 100 - Bureau of labor statistics survey households every month 2. Measurement: BLS Household survey a. Employed : -“or” questions; answer yes to any one of the questions b. Unemployed : u% = #unempl / LF X 100 - “and”; answer yes to all the questions c. Not in Labor Force: - Not available for work - or not actively looking for work - Ex. Retired, Full Time students, Household workers d. Labor Force = a + b e. Working age population = a + b + c 3. Examples 4. “True” problem of unemployment - people working PT but want to work FT : underemployed - People who gave up looking for a job: Discouraged employees 5. Relationship with the business cycle a. Countercyclical, with a lag - unemployment rate
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TODAY’S MENU: Monday 26 October 2009 A. Unemployment: Four Types 1. Frictional(individual): The Good a. A unemployed person available for work and actively seeking and there is a job opening with a skills match. b. short term; desirable; always will be there 2. Structural : The Bad a. Unemployment person and a jpb opening but there is not a skills match or there is a large geographical space in between person and the job b. Long-term; undesirable – wasting human resources; policies- Tax breaks (i.e. paid moving expenses) c. Examples 3. Cyclical : The Ugly a. No job openings available exist when labor market is not in equilibrium (more people then jobs) : Recession b. Short or long-terms: depends on how long the surplus last; very undesirable; policies – create Jobs c. Examples 4. Seasonal (Adjusted data so this doesn’t effect unemployment rate) a. No job openings available because of the season b. Short-term; inevitable; adjustments c. Examples – Winter ski instructor; holiday retail jobs B. Policy Goal: Full Employment 1. A labor market where there is 0 cyclical unemployment; equilibrium
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economics (test3) (Autosaved) - TODAYS MENU Wednesday 21...

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