Economic Challenges: Unemployment, Inflation, and Poverty

Do Now Describe the impacts/consequences of Globalization (USE YOUR NOTES!!)

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Should Unemployment benefits be expanded or cut?

Unit 7 Part I Describe the unemployment rate Identify the four major types of unemployment Discuss the main economic costs of unemployment

Question… Why should we care about unemployment?

Unemployment Rate = percentage of labor force that is unemployed Labor force is people above 16, below 65 and are 1. Looking for work actively 2. Have a job

No job + looking for work + part of labor force = counted as unemployed That is it!! Who does that leave out?!

Who does that leave out? 1. Discouraged Workers: people who have wanted a job but have stopped looking Stiff competition for one job Frustration, depression 2. Underemployed: workers who have jobs below their skill level or work part-time but want full time work

4 Types of Unemployment 1. Frictional Unemployment: temporary job loss when worker moves from one job to another Health part of the economy: finding better jobs, actor, musician Mr. Said Example

4 Types of Unemployment 2. Structural Unemployment: Changes in technology and changes in consumer tastes can leave people jobless Ex: CD players, fads that are now dead How can better technology hurt job growth?

4 Types of Unemployment 3. Seasonal Unemployment: joblessness that happens because of changes in weather or time of the year Retail stores Agriculture

4 Types of Unemployment 4. Cyclical Unemployment: joblessness due to recessions and economic downturn. The worst kind of the 4

What kind of unemployment?

What type of unemployment?

Your choice… 1. Complete the back of your worksheet titled “Types of Unemployment Part II” Or… 2. Create a political cartoon using colored pencils, markers, on separate sheet of paper that describes one of the “4” types of unemployment

Unit 7 Part II Explain how economists evaluate price changes over time Describe what causes inflation Explain how inflation affects the economy

Is 1 million dollars worth in 2014 or in the 1960? Why? Y Y

What is inflation Inflation: an increase in the average price of all products in an economy Happens when overall quantity demanded exceeds quantity supplied for a long period of time People compete for scare resources (Price goes up!)

A new home in Brooklyn, NY cost $2,500 (1853) A routine doctor’s visit cost $2 (Florida, 1852) A dozen pairs of Levi Strauss blue jeans cost $13.50 (1874) One pair of shoes cost $0.98 (1875) One suit cost $10.00 (1875) One Oldsmobile cost $650 (1904) Total annual cost of Cornell University, including living expenses was $1,400 (1927) One movie ticket cost $1 (Chicago, 1978)

Consequences of Inflation Consequences of Inflation: Write these down!! Encouraged Speculation Distorted distribution of income Distorted spending patterns The value of wages goes up***** Hyperinflation: When inflation goes insanely high! Can you imagine trying to spend millions of dollars just trying to buy food? Welcome to Zimbabwe…

Making Money in the Stock Market

What is a stock? Stock = % ownership in a company. If you buy stock, you technically own part of the company you bought stock in Stocks are traded daily in the stock market (New York Stock Exchange) (high speed trading video)

How do I make money off stocks? Stocks go up and down in value every day BUY LOW, SELL HIGH Sell the stock at a high price, and you make the difference in cash Ex: Buy stock when it’s at $50, sell it at $100, you make $50 times the amount of shares you bought (100, 200 shares, etc)

What causes the price changes? Company makes money or looks like it’s doing well = increase in stock price Company loses money or looks like it’s not doing well = decrease in stock price **Ex: New person takes over as CEO for company (stock price usually increases)**

Optional Slide (Investing Info) ey101/ ey101/ If you want to know more about money, investing, saving, and smart ways to use your money Check out stock market posters in the back of the room