KECSS Ms. Murren Economics12/20/11

Outcome: SWBAT identify and explain the different types of unemployment

Initial Activity

http://www.youtube.com/watch?feature=player_detailpage&v=2uxqGjn_Pac

Mini Lesson What is the unemployment rate?

o The percentage of the civilian labor force that is without jobs but actively seeking work.

• Review question: Define the civilian labor force

Mini Lesson High unemployment is usually a sign that all is not

well with the economy. More importantly the waste of human resources that unemployment causes is an extremely serious problem. As a result maintaining a low unemployment rate is one of the major goals in creating a stable economy.

• Review question : Where would a country with a high unemployment rate fall on a Production Possibilities Curve?

• Critical Thinking Question: Why do you believe a goal of a stable economy is low unemployment and not no unemployment ?

What are the types of Unemployment

Cyclical- Unemployment associated with up or down fluctuations in the business cycle. It is characterized by rises during recessions and falls during recoveries or booms.

Structural- Unemployment caused by changes in the economy such as technological advances or discoveries of natural resources. Ex. When workers are replaced by computers or machines or when cheaper natural resources are found elsewhere.

Types of Unemployment

Seasonal- Unemployment caused by changes in the seasons or the weather. This affects construction workers and farm workers

Frictional- Temporary Unemployment between jobs because of firings, layoffs, voluntary searches for new jobs or retraining. This always exists to some degree because of the time needed between jobs to find new work and the imperfect match between openings and applicants

Mini Lesson What is full employment?

o The condition of the economy when the unemployment rate is lower than a certain percentage established by economists’ studies. Economists generally consider full employment to be when the unemployment rate is about 5%. The unemployment rate is only an estimate and does not include: people who have stopped looking for work and those who work in a family business for no pay

Mini Lesson Unemployment statistics are difficult to

measure accurately because o (a) the government cannot possibly interview

every person in and out of the labor force

o (b) Survey results are imperfect because of the existence of an underground economy. The underground economy consists of people who do not follow state employment regulations and persons such as drug traffickers

Research Paper There are two major schools of thought

surrounding the reduction of the unemployment rate: Keynesian (demand-side) economics and Monetarism (supply-side) economics. How does each school of thought propose we get to full employment? If you became the president of the United States, which strategy would you employ? Explain why.

This paper should be at least 2 pages in length, typed, double spaced 12 point font. Plagiarized papers will receive a grade of 0 no exceptions! Please include your bibliography. At least one resource must be a book.