ECON202 Lecture 24: ECON202 Lecture : Unemployment and Inflation
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Module 4: Unemployment and Inflation
• Define and calculate a wide set of labour market measurements (unemployment rate, labour
force participation rate, etc.).
• Explain how the unemployment rate has evolved over time, and how unemployment varies by
province, age, gender, and education levels.
• Explain why unemployment rates are higher for youth.
• Understand/explain labour market demand and supply, as well as be able to describe the flows
in and out of the labour market that create unemployment.
• Define and explain frictional, structural, seasonal, and cyclical unemployment, as well as full
employment, and be able to categorize different described unemployed individuals into the 4
• Basically, be able to begin to understand how the labour market works, and how it is affected by
positive and negative shocks of the economy.
• Define the two major types of price levels, and be able to calculate the inflation rate.
• Identify the societal costs of unemployment and inflation.
• Define and explain deflation.
Figure 4.1 below shows the different types of labour market measures we might look at:
working-age population, labour force, employed and unemployed.
Figure 4.1 The Labour Force
• This calculation of the labour force comes from the Labour Force Survey, which is a monthly
survey of 54,000 households by Statistics Canada.
• To be officially counted as unemployed, you must be actively seeking work in the last 4 weeks,
or expecting to be recalled from a layoff, or waiting to start a new job within 4 weeks.
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