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Chapter 9 Notes FULL lecture notes for Chapter 9

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ECON 102
Angela Trimarchi

Econ 102 Chapter 9 NotesProf Angela TrimarchiChapter 9 Natural Rate of UnemploymentThe rate of unemployment that exists when the economys output is at its fullemployment levelTypes of UnemploymentFrictional UnemploymentoUnemployment caused by the normal workings of the labour marketoOccurs when people are searching for jobsoAlso called Search UnemploymentStructural UnemploymentoUnemployment caused byAdjustments restructuring of the economyMismatch between workers and jobsDecline in demand for goodsoAlso called Technological UnemploymentoExamples of structural unemploymentDVDs vs VCRs makers of VCR productsoOptions for structurally unemployed peopleaccept a lowerpaying available job for which they are overqualifiedRetrain for higher paying available jobs within the same labour marketMove to a new location where there are vacant jobs for persons with their skillsSeasonal UnemploymentoUnemployment that occurs during different seasons of the yearCyclical Unemploymentocaused by year to year fluctuations in unemployment in excess of structural and frictional unemploymentocauses real GDP to fall below potential GDPQuestion Is there frictional and structural unemployment when the economy is at its natural rate of unemployment YESHow is Unemployment MeasuredUnemployment is measured by the Labour Force Survey LFSLabour Force Survey determinesAdult PopulationoIndividuals 15 years of age or olderoAlso called workingage populationEmployed EEcon 102 Chapter 9 NotesProf Angela TrimarchioThose working at a job parttime or fulltimeUnemployed UoThose not currently working but actively seeking workLabour Force LFConsists of Employed and Unemployed IndividualsWho is not in the Labour ForceRetireesFulltime studentsHousewivesThose receiving welfare or disability incomesThose who are independently wealthyMembers of the armed forcesThose who are in jailThose who are in a mental institutionDiscouraged workersStudents who are only at school no job not looking for a jobQuestion Are the above groups of people in the adult population YESDiscouraged WorkersPeople who would like to work but who have given up looking for work because they believe that no work is availableTherefore they drop out of the labour force and are not counted as being unemployedLabour Market StatisticsLabour Force LFConsists of total number of employed individuals E and unemployed individuals UUnemployment Rate URThe percentage of the labour force who are unemployedURULF100UUE100Question What is the current unemployment rate for CanadaLabour Force Participation Rate LFPRThe percentage of the adult population in the labour forceLFPRLFadult population100THIS IS WHERE YOU STOP
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