Whitman ECON 102 - PowerPoint Lectures for Principles of Macroeconomics

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Slide 1Slide 2Slide 3Slide 4Slide 5Slide 6Slide 7Slide 8Slide 9Slide 10Slide 11Slide 12Slide 13Slide 14Slide 15Slide 16Slide 17Slide 18Slide 19Slide 20Slide 21Slide 22Slide 23Slide 24Slide 25Slide 26Slide 27CHAPTER 7 Unemployment, Inflation, and Long-Run Growth© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Macroeconomics 9e by Case, Fair and Oster1 of 25PowerPoint Lectures for Principles of Macroeconomics, 9eBy Karl E. Case, Ray C. Fair & Sharon M. Oster ; ;CHAPTER 7 Unemployment, Inflation, and Long-Run Growth© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Macroeconomics 9e by Case, Fair and Oster2 of 257PART II CONCEPTS AND PROBLEMSIN MACROECONOMICS© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Macroeconomics 9e by Case, Fair and OsterUnemployment,Inflation, andLong-Run GrowthFernando & Yvonn QuijanoPrepared by:CHAPTER 7 Unemployment, Inflation, and Long-Run Growth© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Macroeconomics 9e by Case, Fair and Oster4 of 2511UnemploymentMeasuring UnemploymentComponents of the Unemployment RateThe Costs of UnemploymentInflationThe Consumer Price IndexThe Costs of InflationLong-Run GrowthOutput and Productivity GrowthLooking AheadCHAPTER OUTLINEUnemployment,Inflation, andLong-Run Growth7PART II CONCEPTS AND PROBLEMSIN MACROECONOMICSCHAPTER 7 Unemployment, Inflation, and Long-Run Growth© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Macroeconomics 9e by Case, Fair and Oster5 of 25Unemploymentemployed Any person 16 years old or older (1) who works for pay, either for someone else or in his or her own business for 1 or more hours per week, (2) who works without pay for 15 or more hours per week in a family enterprise, or (3) who has a job but has been temporarily absent with or without pay.Measuring Unemploymentunemployed A person 16 years old or older who is not working, is available for work, and has made specific efforts to find work during the previous 4 weeks.CHAPTER 7 Unemployment, Inflation, and Long-Run Growth© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Macroeconomics 9e by Case, Fair and Oster6 of 25Unemploymentnot in the labor force A person who is not looking for work because he or she does not want a job or has given up looking.Measuring Unemploymentlabor force The number of people employed plus the number of unemployed.labor force = employed + unemployedpopulation = labor force + not in labor forceCHAPTER 7 Unemployment, Inflation, and Long-Run Growth© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Macroeconomics 9e by Case, Fair and Oster7 of 25Unemploymentunemployment rate The ratio of the number of people unemployed to the total number of people in the labor force. Measuring Unemploymentunemployedunemployment rate = employed + unemployedlabor force participation rate The ratio of the labor force to the total population 16 years old or older. labor forcelabor force participation rate = populationCHAPTER 7 Unemployment, Inflation, and Long-Run Growth© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Macroeconomics 9e by Case, Fair and Oster8 of 25UnemploymentMeasuring UnemploymentTABLE 7.1 Employed, Unemployed, and the Labor Force, 1953–2007(1) (2) (3) (4) (5) (6)Population16 YearsOld Or Over(Millions)LaborForce(Millions)Employed(Millions)Unemployed(Millions)Labor ForceParticipationRate(PercentagePoints)UnemploymentRate(PercentagePoints)1953 107.1 63.0 61.2 1.8 58.9 2.91960 117.2 69.6 65.8 3.9 59.4 5.51970 137.1 82.8 78.7 4.1 60.4 4.91980 167.7 106.9 99.3 7.6 63.8 7.11982 172.3 110.2 99.5 10.7 64.0 9.71990 189.2 125.8 118.8 7.0 66.5 5.62000 212.6 142.6 136.9 5.7 67.1 4.02007 231.9 153.1 146.0 7.1 66.0 4.6Note: Figures are civilian only (military excluded).Source: Economic Report of the President, 2008, Table B-35.CHAPTER 7 Unemployment, Inflation, and Long-Run Growth© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Macroeconomics 9e by Case, Fair and Oster9 of 25UnemploymentComponents of the Unemployment RateUnemployment Rates for Different Demographic GroupsTABLE 7.2 Unemployment Rates by Demographic Group, 1982 and 2008Years Nov. 1982 March 2008Total 10.8 5.2White 9.6 4.5Men 20+ 9.0 4.1Women 20+ 8.1 4.1Both sexes 16–19 21.3 13.2African-American 20.2 9.0MenWomen20+20+19.316.58.47.5Both sexes 16–19 49.5 31.3Source: U.S. Department of Labor, Bureau of Labor Statistics. Data are not seasonally adjusted.CHAPTER 7 Unemployment, Inflation, and Long-Run Growth© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Macroeconomics 9e by Case, Fair and Oster10 of 25UnemploymentComponents of the Unemployment RateUnemployment Rates in States and RegionsTABLE 7.3 Regional Differences in Unemployment, 1975, 1982, 1991, and 20031975 1982 1991 2003U.S. avg. 8.5 9.7 6.7 6.0Cal. 9.9 9.9 7.5 6.7Fla. 10.7 8.2 7.3 5.1Ill. 7.1 11.3 7.1 6.7Mass. 11.2 7.9 9.0 5.8Mich. 12.5 15.5 9.2 7.3N.J. 10.2 9.0 6.6 5.9N.Y. 9.5 8.6 7.2 6.3N.C. 8.6 9.0 5.8 6.5Ohio 9.1 12.5 6.4 6.1Tex. 5.6 6.9 6.6 6.8Sources: Statistical Abstract of the United States, various editions.CHAPTER 7 Unemployment, Inflation, and Long-Run Growth© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Macroeconomics 9e by Case, Fair and Oster11 of 25UnemploymentComponents of the Unemployment RateUnemployment Rates in States and RegionsA Quiet Revolution: Women Join the Labor ForceIf you are interested in learningmore about the economic history of American women, read the book Understanding the Gender Gap: An Economic History of American Women by Harvard University economist Claudia Goldin.CHAPTER 7 Unemployment, Inflation, and Long-Run Growth© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Macroeconomics 9e by Case, Fair and Oster12 of 25UnemploymentComponents of the Unemployment RateDiscouraged-Worker Effectsdiscouraged-worker effect The decline in the measured unemployment rate that results when people who want to work but cannot find jobs grow discouraged and stop looking, thus dropping out of the ranks of the unemployed and the labor force.CHAPTER 7 Unemployment, Inflation, and Long-Run Growth© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Macroeconomics 9e by Case, Fair and Oster13 of 25UnemploymentComponents of the


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