Unemployment
Why is it a good sign for the economy when 3 people are quitting their jobs?
- We are likely to the right of the equilibrium at the AS curve; real wage is lower than
what they are expecting for their current work.
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- If people are quitting jobs, they are confident that they can quickly find better
jobs elsewhere; low competition for jobs; lots of jobs available.
- Natural rate of output (Yn) is amount of output economy produces when
unemployment is at its natural rate. Also called potential output or full employment
output. Determined by economy's stocks of LKHNA
- Short-run aggregate supply curve
- Key aspect: output deviates from its natural rate when the actual price level
deviates from the price level people expected. Sticky-wage theory, sticky-price
theory, misperceptions theory
Measuring Unemployment
Bureau of Labor Statistics (BLS) gathers responses from the Current Population Survey,
categorizes as - employed, - unemployed, - not in the labor force.
Illustrations:
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