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Unformatted text preview: Principles of Economics Cetana PSB Intellis Session 9 Learning Objectives TOPIC 9 1. Define Unemployment Learning Objective 1 Topic 1 the percentage of people 16 years or older in the labor force who are without jobs and are actively seeking jobs. What is the civilian labor force? People 16 years or older who are either employed or unemployed, excluding members of the armed forces and people in institutions What is the total population? What causes unemployment? When total spending falls, businesses will find it profitable to produce a lower volume of goods and avoid unsold inventory Not in Labor Force Armed forces Household workers Students Retirees Persons with disabilities Institutionalized Discourage workers Civilian labor force =employed and unemployed Unemployed New entrants Re-entrants Lost last job Quit last job Laid off u-rate # of unemployed labor force = 100 x labor force participation rate labor force adult population = 100 x Employed Employees Self-employed 2. Identify the types of unemployment Learning Objective 2 Topic 2 Seasonal unemployment: unemployment caused by recurring changes in hiring due to changes in weather conditions Frictional unemployment: unemployment caused by the normal search time requires by workers with marketable skills who are changing jobs, entering, or re-entering the labor force. Structural unemployment: caused by a mismatch of the skills of workers out of work and the skills required for existing job opportunities. Cyclical unemployment: unemployment caused by the lack of jobs during a recession. 3. Explain full employment Learning Objective 3 Topic 3 the situation in which an economy operates at an unemployment rate equal to the sum of the frictional and structural unemployment rates. It is also called the natural rate of unemployment and it changes over time, but today it is considered to be about 5%...
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This note was uploaded on 06/20/2011 for the course ECON 123 taught by Professor Mrews during the Spring '11 term at Korea Advanced Institute of Science and Technology.
- Spring '11