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Economics Unit 6, Lesson 3

• Define unemployment
• Describe the different types of unemployment
• Describe how full employment is measured
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• The number of people (over 16) who do not have jobs but are actively seeking a job.
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between jobs” considered normal, a worker leaves a job to look for a better one. Work your way through college as a waiter and quit to look for better job with your degrees
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2. Seasonal - weather change or annual patterns, change of seasons or weather, cause job loss.
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3.
Structural -change in how economy operates; an entire industry fails; people no longer demand or want that product.
-The worker’s skills do not match the jobs that are available
– workers need new training to enter different industry
– There are four major causes of structural unemployment
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Four Causes of Structural Unemployment
1. New technology – new innovations and ideas sometimes make the old ones obsolete.
2. Change in consumer demand – tastes change and consumers may stop purchasing old items
3. Globalization – jobs may be relocated to another country
4. Lack of education – some people do not have the minimum education or training for the jobs available today.
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4.
Cyclical - jobs are lost in correlation with the business cycle (recession - lose job). Some feel that this is the worst type of unemployment.
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Economic Impact of unemployment is that our standard of living goes down and the economy faces an economic slowdown.
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• An unemployment rate between 4% - 6% is considered full employment or the
Natural Rate of Unemployment (NRU).
• NRU = frictional + structural
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