ECON102 Lecture Notes - Lecture 3: Potential Output, Output Gap, Typewriter

• School: University of Waterloo
• Department: Economics
• Course: ECON102
• Professor: Maryann Vaughan

Document Summary

Lost incomes and production: u(cid:374)e(cid:373)ploy(cid:373)e(cid:374)t (cid:271)e(cid:374)efits (cid:272)reate a safety (cid:374)et, (cid:271)ut do(cid:374)"t (cid:272)o(cid:373)pletely repla(cid:272)e lost ear(cid:374)i(cid:374)gs, not everyone receives benefits, lower consumption, investment in capital, lowers living standard for the present and the future. Lost human capital: prolonged unemployment damages a person"s job prospects by destroying human capital. Labour force survey: working age population total number of people aged 15 years or over who are not in institutional care, two groups. Labour force sum of employed and unemployed workers: employed worker has a paid job, full time, part time, voluntary (want part time job) Four labour market indicators: the unemployment rate, percentage of people in the labour force who are unemployed, unemployment rate = (number of people unemployed/labour force)*100% Involuntary part-timers: part-timers who would like full-time jobs but can"t find them. Increases the natural unemployment rate by lowering the opportunity cost of job search. Price level the average level of prices and the value of money.