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7/24/2019 Macroeconomics UNEMPLOYMENT 1610
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CHAP
TER 5
Prepared by: Fernando Quijanand Yvonn Quijan
2004 Prentice Hall Business Publishing Principles of Economics, 7/e Karl ase, !a" #air
Prepared b
Mr. Eduard R.
Macroeconomics
Unemployment
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Macroec
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2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
&pening Pra"er
Our Father, You bestow upon us your infinite Grace. We are grateful for your perpetual kindnes
Please shower us with wisdom as we gotodays lesson.
We ask this through esus !hrist. "men.
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Macroec
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2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
'ocabular" (rill
Explain the 3 Strains of Inflati
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Macroec
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2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
!e)ie*
Causes and Impacts of Inflati
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Macroec
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2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
E+itorial artoon nal"sis
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Macroec
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2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
.ntro+uction
During the recession that began in 2007, the
unemployed people in the United States rosthan 4 million.
Of the 11 million unemployed people at the e
half !ere "#ob losers,$ people !ho lost
in%oluntarily. During the &reat Depression, the unemplo
rose much more, reaching an all'time high of
in 1)**.
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Macroec
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2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
Emplo"e+ )s nemplo"e
+eople !ho perform any paid !or, a
those !ho ha%e #obs but are absent fbecause of illness, stries, or %acations.
+ersons !ho do not ha%e a #ob, ha%
looed for !or in the prior 4 !eescurrently a%ailable for !or.
Unemployment rate - umber of un
di%ided by the labor force.
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2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
n+eremplo"e+
+eople !ho are compelled to !or shor
than they !ould lie to. Disguised Underemployment /idden Unemployment +rematurely etired
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Macroec
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2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
(isguise+ n+eremplo"me
tric used by some countries in orde
do!n unemployment statistics.
orers are hired for the sae of disguunemployed as employed.
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Macroec
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2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
Prematurel" !etire+
practice mostly obser%ed in go
institutions. 5he go%ernment may as some people t
an earlier age to gi%e !ay to the youn
!ho are seeing employment.
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Macroec
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2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
&3uns a*
States that for e%ery 2 percent that
relati%e to potential &D+, the unemploy
rises about 1 percentage point. +ro%ides the %ital lin bet!een the output
the labor maret. Describes the association bet!een
mo%ements in eal &D+ and ch
unemployment.
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2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
.nformal 6ector
6onsists of ha!ers, street %endors,store o!ners, pedicab dri%ers, etc.
usually self'employed.
+ro%ides cheaper sources of food, gser%ices for the formal sector. Ser%es as an important support group for
sector of the economy.
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Macroec
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2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
Euilibrium nemplo"men
rises !hen people become unemployed %
as they mo%e from #ob to #ob or into and
labor force. Sometimes called frictional unemploymen
people cannot mo%e instantaneously bet! !orer at a 247 con%enience store might
the pay is too lo!, or the hours are too incon%
8uit to loo for a better #ob.
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Macroeconoic!
2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
(iseuilibrium nemplo"me
Occurs !hen the labor maret macroeconomy is not functioning pro
some 8ualified people !ho are !illing t
the going !age cannot find #obs. Sometimes called "in%olutarily unemplo
Structural unemployment 6yclical unemployment
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Macroeconoic!
2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
6tructural nemplo"men
Signifies a mismatch bet!een the suppthe demand for !orers. n acute shortage of nurses arose rece
number of silled nurses gre! slo!ly
demand for nursing care gre! rapidly becaging population.
ot until nurses9 salary rose rapidly and
ad#usted did the structural shortage of nurs
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Macroeconoic!
2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
"clical nemplo"ment
:;ists !hen the o%erall demand declines in business'cycle do!nturns.
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Macroeconoic!
2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
Economic .mpact
hen the unemployment rate goes up, the
is in effect thro!ing a!ay the goods andthat the unemployed !orers could ha%e p
5he largest economic loss occurred d
&reat Depression. 3= 2.7)> 5 est. 5he oil and inflation crises of the 1)70s
also generated more than a trillion dolla
output. 3= 1.>)4 5 est.
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Macroeconoic!
2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
6ocial .mpact
o dollar figure can ade8uately co
human and psychological toll of long p
persistent in%oluntary unemployment. 5he personal tragedy of unemployment
pro%ed again and again.
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Macroeconoic!
2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
8reat (epression 96an #ranc
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Macroeconoic!
2004 Prentice Hall Business Publishin Princi les of Economics 7/e Karl ase !a #air
!ecollection of annemplo"e+ onstruction ;or
< called the roofing outfits and they didn9t need me b
already had men that had been !oring for themyears. 5here !asn9t that many openings. ?ou ha
college education for most of them. nd < !as
anything, from car !ash to anything else. So !hat d
dayA ?ou go home and you sit. nd you begin to gsitting home. :%erybody in the household starts
edge. 5hey start arguing !ith each other o%er s
Bcause they9re all cramped in that space all the time
family ind of got crushed by it.