Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure...
-
Upload
reynold-eaton -
Category
Documents
-
view
213 -
download
0
Transcript of Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure...
![Page 1: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/1.jpg)
Challenge #1 in America
Unemployment
![Page 2: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/2.jpg)
To again monitor the health of our economy, economists measure the Unemployment Rate.
Each month, they survey certain Americans to find out their employment status.
The U.S. Government defines “employed” as people 16 and older meeting one or more of the following criteria.
![Page 3: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/3.jpg)
1. Working for pay or profit for 1 or more hours this week.
2. Working without pay in a family business 15 or more hours.
3. Having a job, but being ABSENT due to illness, weather, vacation, etc.
![Page 4: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/4.jpg)
1. NOT meeting any of the criteria above
AND
2. ACTIVELY looking for work during the past 4 weeks.
The most closely watched and highly publicized labor force statistic is the UNEMPLOYMENT RATE=the percentage of people in the civilian labor force who are UNEMPLOYED.
![Page 5: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/5.jpg)
Measuring Unemployment - Measuring Unemployment - 19941994
EmployedEmployed
Not inNot inlaborlaborforceforce
Under 16and
institutionalized
TotalPopulation267,901,000
TotalPopulation267,901,000
LaborLaborforceforce
136,297,000136,297,000
64,767,00064,767,000
66,837,00066,837,000
Unemployed 6,739,0006,739,000
129,558,000129,558,000
![Page 6: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/6.jpg)
UnemploymentUnemploymentraterate
unemployedunemployed
labor forcelabor forcex 100100=
Measuring UnemploymentMeasuring Unemployment
![Page 7: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/7.jpg)
Structural Cyclical Frictional Seasonal
![Page 8: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/8.jpg)
Unemployment that occurs as a result of changes in technology, consumer preferences, or in the way the economy is “STRUCTURED.” EX: Many TV repairmen had to find new work
as televisions are now built with transistors instead of tubes.
![Page 9: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/9.jpg)
This unemployment results from contractions in the economy.
This type of unemployment HARMS the economy more than any other types of unemployment. During the Great Depression, the
unemployment rate reached an all time high of about 25%.
As recently as 2009 and 2010, the unemployment rate reached 10.2%.
![Page 10: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/10.jpg)
People who have decided to leave one job and LOOK for another typically better job.
Also, new entrants and re-entrants into the LABOR FORCE.
Economists consider frictional unemployment as a NORMAL part of a healthy and changing ECONOMY.
![Page 11: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/11.jpg)
This predictable unemployment fluctuates as a result of HOLIDAYS, school breaks, and industry PRODUCTION schedules.
![Page 12: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/12.jpg)
An increase in the average price level of all products in an economy
Inflation
![Page 13: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/13.jpg)
As prices increase, the amount that a dollar buys decreases.
Inflation reduces the real purchasing power of the dollar.
Real GDP removes inflation.
![Page 14: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/14.jpg)
Inflation that occurs when demand for goods and services exceeds existing supplies
Heavy demand make items more valuable, forcing prices up.
![Page 15: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/15.jpg)
Decrease in purchasing power Erodes fixed income Interest Rates
Savings Investments lose value Loaners lose profit
![Page 16: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/16.jpg)
Occurs when producers raise prices in order to meet increased costs
Factors of production increase (commonly labor) which forces prices to rise.
![Page 17: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/17.jpg)
A decrease in the average price level of all goods and services in an economy.
The most prolonged and most recent deflationary period in the U.S. occurred during the Great Depression, when the unemployment rate was high and wages were low
![Page 18: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/18.jpg)
How do they measure prices of all goods? How do they know that prices are going
up or down?
![Page 19: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/19.jpg)
A price index is a number that tells us how much prices have changed (%) since a base year
![Page 20: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/20.jpg)
If the 1998 price index is 128, and the base year is 1992, then prices have increased 28% between 1992 and 1998
1998 Index = 1281992 Index = 100Price increase= 28
General price rises are called INFLATION
![Page 21: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/21.jpg)
Economists use the Consumer Price Index or the CPI to measure the average change over time in the price of a fixed group of products.
To measure the CPI, the Bureau of Labor Statistics first chooses a base year against which to measure price changes.
![Page 22: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/22.jpg)
Second, they select a representative sample of commonly purchased consumer items, called the market basket. They then set that base year to 100, so that other years can be compared to it easily.
![Page 23: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/23.jpg)
To calculate the CPI, take the price of this year’s cost of the market basket.
Divide it by the cost of the basket in the base year.
Multiply the result by 100. This year’s cost / base year’s cost x
100 For ex. Use the formula to determine the
CPI if the year’s cost is $7000 and the base year’s cost was $4000.
![Page 24: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/24.jpg)
This year’s cost= $7000 Divided by base year’s cost($4000) =
1.75 1.75 x 100 = 175
See the Inflation Rates for 1970-2004 on page 341.
![Page 25: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/25.jpg)
![Page 26: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/26.jpg)
![Page 27: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/27.jpg)
Used to compare different national economies on a per person basis.
GDPPopulation
![Page 28: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/28.jpg)
The poverty rate: the percentage of individuals or families in the total population that are living below the poverty threshold
Poverty threshold: the lowest income as determined by the government that a family or household of a certain size needs to maintain a basic standard of living.
![Page 29: Challenge #1 in America Unemployment To again monitor the health of our economy, economists measure the Unemployment Rate. Each month, they survey.](https://reader030.fdocuments.in/reader030/viewer/2022032704/56649d745503460f94a547d3/html5/thumbnails/29.jpg)
In 2007, the poverty threshold for a family of four was…….
$21,027