Test 4 notes - Test 4 notes Classical People are too picky...

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Test 4 notes Classical People are too picky in getting their job when the time comes they will get jobs to eat. Keynesian Govt has responsibility Not putting enough resources in helping out the people. Potential output The output that would materialize at the target rate of unemployment (national rate of unemployment) and the optimum capacity naturalization rate . Target rate of unemployment (natural rate) Also called full employment unemployment rate 4%-6% The lowest sustainable rate of unemployment that policy makers believe is achiev- able. Structural unemployment Unemployment resulting from changes in the economy itself. (agriculutrual -in- dustrial) it is also called the “skills gap” When the economy is moving from one type to another the skills needed will change. Not willing to learn the new ways Frictional unemployment Caused by people quitting a job just long enough to look for and find another job. Very high in the US Capacity utilization rate Rate at which factories and machines are operating compared to the maximum sustainable rate at which they could be used (85%)
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Test 4 notes - Test 4 notes Classical People are too picky...

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