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Ch. 14 Sec. 2

Ch. 14 Sec. 2. Unemployment. Measuring Unemployment. Unemployment Rate shows the number of unemployed people divided by the total number of people in the civilian labor force. Understates unemployment because it does not include “discouraged” workers or people who are working part-time.

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Ch. 14 Sec. 2

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  1. Ch. 14 Sec. 2 Unemployment

  2. Measuring Unemployment • Unemployment Rate shows the number of unemployed people divided by the total number of people in the civilian labor force. • Understates unemployment because it does not include “discouraged” workers or people who are working part-time.

  3. Kinds of Unemployment • Frictional U-empt- between jobs. Short-term unemp. • Structural U-empt-fundamental change in the economy reduces demand for workers. Changes in tech. & consumer tastes • Cyclical U-empt- changes in business cycle. Ppl. buying less durable goods • Seasonal U-empt- changes in weather or in demand for certain products. Ex.: construction workers, carpenters • Technological U-empt- improvements that make some jobs obsolete. Computers replacing ppl

  4. Full Employment • Lowest possible unemployment rate when the economy is growing & all factors of Prod. are being used as efficiently as possible. • Achieved when the unemployment rate falls below 4.5 %

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