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CH7 SH - ECON 201 FEB 15 AFTER THE SNOW DISCUSSION FRIDAY...

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ECON 201: FEB 15 – AFTER THE SNOW? DISCUSSION – FRIDAY, IMPORTANT TO ATTEND TA’S WILL ADDRESS 3 ASSIGNMENTS & REVIEW CH 3 ON SUPPLY & DEMAND WHAT’S GOING ON IN THE USA? WHAT’S GOING ON IN THE WORLD?
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Feb 15 week
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Unemployment, Inflation, and Growth 1. Unemployment Measuring Unemployment Components of the Unemployment Rate The Costs of Unemployment 2. Inflation The Consumer Price Index The Costs of Inflation 3. Long-Run Growth Output and Productivity Growth
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Employed: BLS survey monthly, 65000 households, in week that contains the 12 th of the month. Any person 16 years old or older who works for pay, either for someone else or in his or her own business for 1 or more hours per week who works without pay for 15 or more hours per week in a family enterprise, or who has a job but has been temporarily absent with or without pay. Unemployed A person 16 years old or older who is not working, is available for work, and has made specific efforts to find work during the previous 4 weeks. 1. Unemployment: Measuring Unemployment
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Not in the labor force A person who is not looking for work because he or she does not want a job or has given up looking Labor force The number of people employed . Unemployment: Measuring Unemployment labor force = employed + unemployed population = labor force + not in labor force
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Discouraged-worker effect : The decline in the measured unemployment rate that results when people who want to work but cannot find jobs grow discouraged and stop looking, thus dropping out of the ranks of the unemployed and the labor force. Ie . It lowers the unemployment rate! Components of the Unemployment Rate
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Unemployment rate: The ratio of the number of people unemployed to the total number of people in the labor force. unemployed unemployment rate = employed + unemployed Labor force participation rate: The ratio of the labor force to the total population 16 years old or older. labor force labor force participation rate = population Unemployment: Measuring Unemployment
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Defining and Measuring Unemployment Computing the unemployment rate for the month of July 2008: Labor force:  154.6 million Employed:     145.8 million Unemployed:     8.8 million 8.8 145.8 + 8.8 = Unemployment rate = 5.7% http://www.bls.gov/news.release/empsit.t02.htm
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Defining and Measuring Unemployment Computing the unemployment rate for the month of July 2009: Labor force:   154.5 million Employed:     140.0 million Unemployed:   14.5 million http://www.bls.gov/news.release/empsit.nr0.htm 14.5 140.0 + 14.5 = Unemployment rate = 9.4%
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Unemployment: Measuring Unemployment Employed, Unemployed, and the Labor Force, 1953–2007 (1) (2) (3) (4) (5) (6) Population 16 Years Old Or Over (Millions) Labor Force (Millions) Employed (Millions) Unemployed (Millions) Labor Force Participation Rate (Percentage Points) Unemployment Rate (Percentage Points) 1953 107.1 63.0 61.2 1.8 58.9 2.9 1960 117.2 69.6 65.8 3.9 59.4 5.5 1970 137.1 82.8 78.7 4.1 60.4 4.9 1980 167.7 106.9 99.3 7.6 63.8 7.1 1982 172.3 110.2 99.5 10.7 64.0 9.7 1990 189.2 125.8 118.8 7.0 66.5 5.6 2000 212.6 142.6 136.9 5.7 67.1 4.0 2007 231.9 153.1 146.0 7.1 66.0 4.6 Note: Figures are civilian only (military excluded).
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