AP Macro: Short quiz

1. If the labor force is 10 million and 2 million people are unemployed and looking and .5 million are discouraged

workers. What is the unemployment rate?

2. What was the AZ unemployment rate in 2009?3. What was the worst recent year to look for a job in Arizona?

4. According to this graph, describe the Arizona job market in 2014

Types of Unemployment

• Why do people lose their jobs?– Or

• Why can’t they find a new job?

Types of unemployment• Frictional Unemployment

• New entrants in to job market

• Fired, quit, recent graduates

Types of unemployment• Seasonal Unemployment

• Certain jobs are not year round

Types of unemployment• Cyclical Unemployment

• Job losses caused by less spending

• Layoffs during recessions

Types of unemployment• Structural Unemployment

• Caused by changes to the economy over time

technology

Changes in taste

Lack of skillsGlobal Competition

Show structural unemployment movie

Underemployment• When a person is overqualified for their job

• Opportunity cost

Not counted in LF?

• Labor force participate rate

• LF/adult population X100 = % between…..

Mankiw assignment

• Page 596 graph, make 3 observations about unemployment and LFP rate

• What explains your observations?

• Page 614 Problems: 1, 4, 5, 9