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3 cyclical unemployment caused by a downward wing in

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3. Cyclical Unemployment Caused by a downward wing in the business cycle. It affects workers in many different industries simultaneously, and is usually accompanies a recession or depression. As income drops, spending drops, this eventually leads to workers being laid off. The government tries to avoid cyclical unemployment through the promotion of growth and efficiency. 4. Seasonal Unemployment. In our society, at any given time, there are thousands of people out of work because it is the "slow season". There is a "tourist season" and a "harvest season". When the season is over, the workers may collect unemployment benefits or remain out of the workforce until the new season begins. Full employment refers to when an economy operates at an unemployment rate equal to the sum of frictional and structural unemployment rates. The definition of full employment has changed over the years. It has increased. It used to be 3%. Now it 7
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ISS 225 – Power, Authority, Exchange Economic Order ranges between 4 and 5 % depending on the economist or the current administration. It is another way of underestimating the impact of unemployment. There are a number of problems with using the unemployment rate as a method to assessing our economy. First, the unemployment rate can sometimes overstate the number of people unemployed. For example, people who say they are looking for work to collect unemployment benefits or welfare benefits. The opposite can also be true. Sometimes there is understating of the number of people unemployed. For example, discouraged workers, those workers who would like to have a job but have given up looking, are not counted as unemployed because they are not included in the labor force. From a statistical point of view, these people are not considered unemployed. It is as if they are not part of our economy. To be counted as unemployed by the Bureau of Labor, you have to be looking for work . A third problem is that the official unemployment rate includes part-time workers as fully employed. Another problem is dealing with underemployed. These are workers who are working at jobs that they are overqualified for. The traditional person with a PhD driving a taxicab is an example. The economy does not benefit from the full range of their skills. For a look at U.S. unemployment rate over time see http://data.bls.gov/timeseries/LNS14000000 . C. Inflation A goal of our government is to strive to keep prices stable. Every administration tries to avoid inflation problems because they know voters tend to blame higher prices on whoever is in office. Inflation refers to the increase in the average price of goods and services in the economy. It represents an increase in the overall average level of prices and not an increase in the price of any specific product. During the late 1970's and early 1980's the United States experienced a time of rising prices. The opposite of inflation is deflation.
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