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CH 07
CH 07
Inflation, and 7
Long-Run Growth
CHAPTER OUTLINE
Unemployment
Measuring Unemployment
Components of the Unemployment Rate
The Costs of Unemployment
Inflation
The Consumer Price Index
PART II Concepts and Problems in Macroeconomics
Measuring Unemployment
employed Any person 16 years old or older (1) who works for
pay, either for someone else or in his or her own business for 1
or more hours per week, (2) who works without pay for 15 or
more hours per week in a family enterprise, or (3) who has a
job but has been temporarily absent with or without pay.
PART II Concepts and Problems in Macroeconomics
Measuring Unemployment
not in the labor force A person who is not looking for work
because he or she does not want a job or has given up looking.
Measuring Unemployment
unemployed
unemployment rate =
employed + unemployed
PART II Concepts and Problems in Macroeconomics
labor force
labor force participation rate =
population
Measuring Unemployment
TABLE 7.3 Regional Differences in Unemployment, 1975, 1982, 1991, 2003 and 2010
Discouraged-Worker Effects
Frictional unemployment
PART II Concepts and Problems in Macroeconomics
Structural unemployment
Cyclical unemployment
Social Consequences
At the bottom were the poor and the fully unemployed, about
25 percent of the labor force. Even those who kept their jobs
found themselves working part-time.
output growth The growth rate of the output of the entire economy.
The first chapter of this part introduced the field; the second chapter discussed
the measurement of national product and national income; and this chapter
PART II Concepts and Problems in Macroeconomics
We are now ready to begin the analysis of how the macroeconomy works.