Unemployment

Labor force

made up of individuals 16+ who have a job or are actively seeking a job

Frictional

________: when people take time to find a job.

Zero unemployment

________ is always impossible in a market economy.

unemployment rate

A(n) ________ of about 4- 6 % is normal during full employment.

Goal

full employment

Frictional

when people take time to find a job

Structural

when skills don't match what jobs are available for (structure of) the current economy

Causes

new technology, new resources, changes in consumer demand, globalization (shift to foreign markets), lack of education

Seasonal

people work at specific times of years

Cyclical

goes up during times of economic turmoil, goes down during times of economic prosperity

What is a normal unemployment rate?

4-6%

unemployment rate

percentage of a nation's labor force that is unemployed

Ashelle is laid off. What type of unemployment does this fall under?

Frictional unemployment

Ashelle quits her job in fast food in the hopes of finding a better one in retail. What type of unemployment does this fall under?

Frictional unemployment

Ashelle needs time to find a job after graduating college. What type of unemployment does this fall under?

Frictional unemployment

New technology and new resources have the ability to cause which type of unemployment?

Structural

Globalization

shift to foreign markets

A Spirit Halloween shop opens in late September. Ashelle applies to work at the store for the month of Halloween. Which type of employment does this resemble?

Seasonal Employment

How can a recession cause cyclical unemployment?

A recession causes people to save more and spend less, so companies may have to slow down production and lay off workers.

Most recently, businesses have increased the use of

outsourcing

Outsourcing

obtaining goods or services from an outside or foreign supplier

Creeping inflation

rise in prices ranging from 1 to 3% per year

Consumer price index

an index of the cost of all goods and services to a typical consumer

Cost push

Higher wages drive up the manufacturer's cost of products, forcing them to raise prices

Ashelle's job has hired a new worker, Harry. Harry is a machine that can process 150 tasks per minute, while Ashelle can only process 10 tasks per minute. Because of this, Ashelle is laid off. What type of unemployment does this resemble?

Technological