{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

ISS_225_Lec_8_Economics

The example below is for per capita real gdp in the

Info iconThis preview shows pages 6–8. Sign up to view the full content.

View Full Document Right Arrow Icon
gross domestic product of a country by its population. The example below is for per capita real GDP in the United States for 1994. GDP = $8,083,400,000 = $30,173 (per capita GDP) Population 267,901,000 For a look at U.S. GDP over time see http://www.tradingeconomics.com/united- states/gdp-growth . B. Unemployment Since the Great Depression, our government has made it a priority to focus on how to keep the unemployment rate down. That means to promote long-term economic growth; we first have to fix any short-term unemployment problems. To achieve economic growth, governments focus on a number of economic indicators including unemployment. The unemployment situation focuses on the number of workers in the labor force. The United States labor force consists of anyone who is 16 years or older, not in an institution, and is working. The Civilian labor force is the labor force minus the military. In economic terms, unemployment then refers to idle labor. To be counted in the unemployment rate, a person must be at least 16 years of age and without work, but actively looking for a job . The unemployment rate then, is the ratio of 6
Background image of page 6

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
ISS 225 – Power, Authority, Exchange Economic Order the number of unemployed persons to the number of persons in the labor force. For example, if there are 128 million people in the labor force, and there are 8.7 million people unemployed, then the unemployment rate would be 6.8 percent. There are four main types of unemployment. Of the four, structural and cyclical are of the most concern to economists and government officials. 1. Frictional Unemployment. Temporary unemployment due to imperfections in the labor market. It occurs when people are in between jobs or just entering or reentering the labor force. Frictional unemployment is brief. It takes time to post a position, go through the interview process, and then to finally get a person to the business to work. At any given time, 2 - 3 percent of the labor force is frictionally unemployed. Examples of frictional unemployed workers include those who get fired, quit, or are looking for new jobs, students, homemakers reentering the labor force, and servicemen and women who have recently been discharged from the armed services. 2. Structural Unemployment. Long term unemployment due to changes in the structure of the economy. Demand for some kinds of goods gives way to demand for other types of goods. For example, telegraph operators have lost their jobs to technology. Other reasons that contribute to structural unemployment include: 1) workers lacking required skills, 2) unable to move out of depressed areas, 3) displaced because of changing technology, 4) discrimination, and 5) employers laying off workers because the cost exceeds the return. The affect of structural unemployment in an economy is sometimes hard to measure. If a worker loses a high paying job, say at $15 per hour, and gets rehired at say $7 an hour, statistically this worker shows up as employed. But such a statistic is misleading. That worker will have to adjust his/her living standards accordingly. If this is happening to tens of thousands of
Background image of page 7
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

Page6 / 16

The example below is for per capita real GDP in the United...

This preview shows document pages 6 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon bookmark
Ask a homework question - tutors are online