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Chapter 5

ECON 1100 Chapter Notes - Chapter 5: Nominal Interest Rate, Real Interest Rate, Labour Force Survey


Department
Economics
Course Code
ECON 1100
Professor
Parisa Mahboubi
Chapter
5

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Chapter 5: Unemployment and Inflation
Measuring the Unemployment Rate and the Labour Force Participation Rate
- Labour Force Survey: involves collecting the data needed to compute the
unemployment rate.
- It only focuses on those in the working class
Working age Population: people 15 years of age and older who are legally entitled to work in
Canada.
The participants who are surveyed are put into three categories:
Employed: anyone who did paid work, unpaid work for a family business, or worked for
themselves.
Unemployed: people ho do’t hae a jo ut are illig ad ale to ork ad hae looked for
work in the last four weeks.
Unemployment Rate = Number of unemployed * 100
Labour Rate
Not in the labour force: people who are willing or unwilling to do paid work
Labour force participation rate (participation rate):
Participation rate = Labour force * 100
Working age population
Employment population ratio:
Employment-population ratio = Number of employed * 100
Working age population
Types of Unemployment
- In a falling or rising recession unemployment rate never falls to zero
These four types of unemployment explain why:
Frictional Unemployment: is short-term unemployment that arises from the process of
matching workers with jobs.
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