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Macroeconomic instabilty. ppt - Chapter:7 TheMacroEconomy...

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    Chapter:7 The Macro Economy:  Unemployment, Inflation,  and Deflation
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    Chapter Outline Unemployment The Major Types of Unemployment  Full Employment and the Natural Rate of Unem Inflation and Deflation Anticipated versus Unanticipated Inflation Changing Inflation and Unemployment:  Business Fluctuations
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    Did You know? Trying to understand and better forecast labor  employment and the overall performance of  the national economy is a central objective of  macroeconomics? This branch of economics seeks to explain  and predict movements in unemployment, the  average level of prices, and the total  production of goods and services?
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    Learning Objectives Explain how the U.S.  government calculates the  official unemployment rate  Discuss the types of unemployment Describe how price indexes are  calculated and define the key types  of price indexes
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    Learning Objectives (cont'd) Distinguish between nominal and real  interest rates Evaluate who looses and who gains  from inflation Understand key features of  business fluctuations
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    Unemployment & Labor Force Unemployment Total number of adults (aged 16 years or older)  willing and able to work and who are actively  looking for work and have not found a job Labor Force Individuals aged 16 years or older who either have  jobs or who are looking and available for jobs; the  number of employed plus the number of  unemployed 
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    Unemployment rate  The unemployment rate is the  percentage of the measured  labor  force  that is unemployed.
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    MEASUREMENT OF UNEMPLOYMENT August 2010 Total Population 310,415,211 1 Under 16 and institutionalized 77,639,211 2 Not in the labor force 78,666,000 3 Labor Force * 154,110,000 Employed 139,250,000 Unemployed 14,860,000 * Employed and those who are unemployed but actively seeking work Unemployment rate = Unemployed * 100 Labor Force Unemployment rate = 14,860,000 *100 = 9.6% 154,110,000 " A nation's Economic Health is Measured by the Unemployment Rate"
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    Unemployment rate August 2010    14,860,000 * 100   =  9. 6%     154,110,000
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    Measuring Unemployment  Rate Labor force =  The Employed + The unemployed Unemployment rate  = Unemployed * 100                                       Labor force
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    Unemployment Statistics Men: 9.8 % Women:7.5% Whites: 8.6 %
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