Measuring the Econo14

Measuring the Econo14 - instead just waiting to begin their...

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Measuring the Economy Unemployment Unemployment is a macroeconomic phenomenon that directly affects people. When a member of a family is unemployed, the family feels it in lost income and a reduced standard of living. There is little in the realm of macroeconomics more feared by the average consumer than unemployment. Understanding what unemployment really is and how it works is important both for the economist and for the consumer, as it is often discussed. Types of Unemployment While unemployment is a general term that describes people who wish to work but cannot find jobs, there are actually a number of specific types of unemployment. Three particular types of unemployment stand out as most important, frictional unemployment, structural unemployment, and cyclically unemployment 1. Some people who are not working are simply between jobs. This may be the result of being hired elsewhere or simply relocating. They are not actively searching for a job, but
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Unformatted text preview: instead just waiting to begin their next job. This is called frictional unemployment because these workers are literally between jobs. 2. Other workers have a mismatch of skills for the job or geographic area that they want to work. If a welder is displaced by a robot or if a nuclear engineer is simply no longer needed in a lab, these workers become unemployed. This type of unemployment is called structural unemployment because the structure of the job is incompatible with the skills offered by the worker. 3. Finally, some workers may be laid off as the economy slows down. These workers possess the necessary skills, but there is simply not enough demand for their firms to continue to employ them. This type of unemployment is called cyclical unemployment because it is attributable to changes in output due to the cycles of the economy....
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This note was uploaded on 02/09/2012 for the course ECO ECO2013 taught by Professor Jominy during the Fall '08 term at Broward College.

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