Unemployment and Macro Stabilization Policies - Lecture 10 - Social Sciences 1 with Bresnock at University of California - Irvine

Unemployment Rate

Defined as the % of the "labor force" that is not working

(Labor force is all people 16 years and older who are "seeking" work, or unemplyed, and are not in institutions.)

Types of unemployment

1. Frictional - temprorary, transitional, voluntary; may consist choosing to be mobile for career, and/or salary reasons; also includes new entrants and reentrants to the labor force

2. Cyclical - resulting from swings in the business cycle

3. Structural - "hardcore" and "technological" unemployment, results from people lacking the skills for available jobs, persons w/ skills no longer needed; also caused by changes over time in demand and technology that alter the structure of total demand

Measuring unemployment

1. Marginally employed

2. Discouraged workers

3. Underemployed

4. Partially unemployed

Marginally employed

Those workers who are partially dependent on the pay of others like housewives or students; including this group ↑s unemployment statistics

Discouraged workers

"Hidden" or "invisible" unemployment; those workers who have given up looking for work; persons are not recorded as unemployed thus ↓ understates of the actual amount of people listed as statistically unemployed

Underemployed

Those who are employed full-time, but who are really unemployed full-time from their chosen careers but who are counted as employed. This causes the unemployment statistics to be lower, thus underestimating the true unemployment problem

Partially employed

False information

"Full employment" unemployment rate

"Potential output"

Causes of unemployment

Changing composition of the labor force

Raising minimum wage

Advances in technology

Business cycle fluctuations

Costs/burdens of unemployment

Burdens classifed as:

Aggregate demand

Price level and GDP

`Interest-Rate effect

Weath (or real balances) effect

Foreign purchases effect

Changes in aggregate demand

Factors affecting C component of AD

Factors affecting I component of AD

Factors affecting G component of AD

Factors affecting X component of AD

Aggregate supply (AS)

Range #1

Range #2

Range #3

Factors affecting AS

Input prices

Productivity

Legal and insitutional environment

Equilibrium: Real output and the price level

Two reaons for macroeconomic disequilibrium

Macroeconomic stabilization policies

Marginal propensity to consume

Spending multiplier

Related Textbooks

Econ Social Issues-Ise

Related Study Materials

exam_1_study_guide_sp_2013.doc

chapter 7 poverty and discimination: why are so many still so poor?

Recent Class Questions

michael, accused of assault, was found incompetent to stand trial sixteen years ago. since that time, he has been held in a state mental facility. this is likely in violation of

in experiment #2, you will test the effect of co2 on ventilatory drive. what will be the independent and dependent variables?

suppose that a new study comes out showing that brazilian coffee has a higher cancer risk than other countries around the world. will the brazilian real appreciate or depreciate relative to the euro?

Popular Study Materials from Social Sciences 1

exam 1

ss1a midterm #2

socsci 1 study guide (2013-14 christopherson)

final study guide deck

final study guide.docx

exam 2 study guide summer 2014.doc

exam_1_study_guide_sp_2013.doc

business cycles and economic growth - lecture 9

socsci 1 study guide (2012-13 christopherson)

exam 1

exam 1

economics of discrimination - lecture 8

Unemployment And Macro Stabilization Policies - Lecture 10

Related Textbooks

Related Study Materials

Recent Class Questions

Popular Study Materials from Social Sciences 1