ECON 102 Lecture 9: ECON 102 - Chapter 9 Notes

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University of British Columbia - Okanagan
ECON 102
Karl Pinno

Tuesday, October 25, 2016 ECON 102 Chapter 9: Unemployment and Its Natural Rate The problem of unemployment is usually divided into two categories: The longrun problem The shortrun problem The economys natural rate of unemployment refers to the amount of unemployment the economy normally experiences. Cyclical unemployment refers to the yeartoyear uctuations in unemployment around the natural rate. Identifying Unemployment How is unemployment measured? Every month, Statistics Canada (SC) conducts the Labour Force Survey (LFS) Data are collected on: Unemployment Employment Length of workweek Duration of unemployment From the results of the survey, each adult (aged 15 and older) from the survey is either: employed (spent some time in the previous week working at a paid job) unemployed (on temporary layoff or is looking for work) not in the labour force (none of the above, e.g., fulltime student, a retiree, homemaker) Once the surveyed individuals are categorized, then SC will compute various statistics. Labour force: the total number of workers, including both the employed and unemployed LF = No. of employed + No. of unemployed Unemployment rate: the percentage of the labour force that is unemployed No. of unemployed 1 U= 100 LF
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