Unemployment What are the different types of unemployment? How are unemployment rates determined? What is full employment?

Vocabulary Frictional Unemployment Seasonal Unemployment Structural Unemployment Cyclical Unemployment Unemployment rate Census Full Employment Underemployed Discouraged Worker

Unemployment Video Video Part 1 Video Part 2

1. Frictional Unemployment Types of Unemployment 1. Frictional Unemployment Occurs when people change jobs, get laid off from their current jobs, take some time to find the right job after they finish their schooling, or take time off from working for a variety of other reasons

Structural Unemployment Occurs when workers' skills do not match the jobs that are available. Technological advances are one cause of structural unemployment

Seasonal Unemployment Occurs when industries slow or shut down for a season or make seasonal shifts in their production schedules

Cyclical Unemployment Unemployment that rises during economic downturns and falls when the economy improves

What Kind of Unemployment is It? John was not satisfied with his job as a teacher so he left his job to begin looking for a position as a bartender. What type of unemployment is this? (frictional, structural, seasonal, or cyclical)

Answer Frictional

What type of unemployment is it? Adam worked at an auto factory but lost his job because a robot was invented to do his work. What type of unemployment is this?

Answer Structural

What type of unemployment is it? The current unemployment rate in the U.S. is 9.6%. This is a huge increase from the 4.5% rate at the beginning of 2007. Which type of unemployment do you think is causing the majority of the increase? (structural, seasonal, frictional, cyclical)

Determining the Unemployment Rate A nation’s unemployment rate is an important indicator of the health of the economy. The Bureau of Labor Statistics polls a sample of the population to determine how many people are employed and unemployed.

The unemployment rate is the percentage of the nation’s labor force that is unemployed. The unemployment rate is only a national average. It does not reflect regional economic trends.

Full Employment Economists generally agree that in an economy that is working properly, an unemployment rate of around 4 to 6 percent is normal. Sometimes people are underemployed, that is working a job for which they are over-qualified, or working part- time when they desire full-time work.

Discouraged workers are people who want a job, but have given up looking for one. Full employment is the level of employment reached when there is no cyclical unemployment. (4-6 Percent)

Section 1 Assessment 1. Unemployment that occurs when workers’ skills do not match the jobs that are available is known as (a) frictional unemployment. (b) structural unemployment. (c) seasonal unemployment. (d) cyclical unemployment. 2. The unemployment rate (a) is the percentage of the labor force that is unemployed. (b) is the number of people who are unemployed. (c) includes only discouraged workers. (d) is the percentage of the labor force that is underemployed. Want to connect to the PHSchool.com link for this section? Click Here!

Section 1 Assessment 1. Unemployment that occurs when workers’ skills do not match the jobs that are available is known as (a) frictional unemployment. (b) structural unemployment. (c) seasonal unemployment. (d) cyclical unemployment. 2. The unemployment rate (a) is the percentage of the labor force that is unemployed. (b) is the number of people who are unemployed. (c) includes only discouraged workers. (d) is the percentage of the labor force that is underemployed. Want to connect to the PHSchool.com link for this section? Click Here!

Assignment You have been given one of the types of unemployment to write about. Imagine that you are a person experiencing that type of unemployment. 1. On a sheet of paper Identify the type of unemployment and create a profile of an imaginary character (name, background, marital status, children, former occupation, etc..) 2. Write three diary entries from the perspective of this imaginary person. The entries need to explain how the person became unemployed, how the person feels about being unemployed, and the actions she or he has taken since becoming unemployed

Inflation What are the effects of rising prices? How do economists use price indexes? How is the inflation rate calculated? What are the causes and effects of inflation?

Inflation Purchasing Power Price Level Inflation Rate Vocabulary Inflation Purchasing Power Price Level Inflation Rate Consumer Price Index Market Basket

The Effects of Rising Prices Inflation is a general increase in prices. Purchasing power, the ability to purchase goods and services, is decreased by rising prices. Price level is the relative cost of goods and services in the entire economy at a given point in time.

Price Indexes A price index is a measurement that shows how the average price of a standard group of goods changes over time. The consumer price index (CPI) is computed each month by the Bureau of Labor Statistics. The CPI is determined by measuring the price of a standard group of goods meant to represent the typical “market basket” of an urban consumer. Market Basket – A representative collection of goods and services.

Consumer Price Index Year 2 Year 1 $103.00 $100 There was a 3% increase in the price for the market basket of goods. (same goods, more money)

Inflation Changes in the CPI from month to month help economists measure the economy’s inflation rate. The inflation rate is the percentage change in price level over time

Effects of Inflation High inflation is a major economic problem, especially when inflation rates change greatly from year to year. Purchasing Power In an inflationary economy, a dollar loses value. It will not buy the same amount of goods that it did in years past.

Savings $100 Interest 3% End of Year $103.00 $103.00 Interest Rates When a bank's interest rate matches the inflation rate, savers break even. When a bank's interest rate is lower than the inflation rate, savers lose money. Savings $100 Interest 3% End of Year $103.00 $103.00

Income If wage increases match the inflation rate, a worker's real income stays the same. If income is fixed income, or income that does not increase even when prices go up, the economic effects of inflation can be harmful.

Inflation hurts those on fixed income the most. Why?

Section 2 Assessment 1. Inflation is (a) the process by which rising wages cause higher prices. (b) the price increase of a typical group of goods. (c) a general increase in prices. (d) the ability to purchase goods and services. 2. Too much money in the economy is the cause of inflation according to (a) the quantity theory. (b) the demand-pull theory. (c) the quantum theory. (d) the cost-push theory. Want to connect to the PHSchool.com link for this section? Click Here!

Section 2 Assessment 1. Inflation is (a) the process by which rising wages cause higher prices. (b) the price increase of a typical group of goods. (c) a general increase in prices. (d) the ability to purchase goods and services. 2. Too much money in the economy is the cause of inflation according to (a) the quantity theory. (b) the demand-pull theory. (c) the quantum theory. (d) the cost-push theory. Want to connect to the PHSchool.com link for this section? Click Here!

Section 3 - Poverty Objectives: Define who is poor according to government standards Describe the causes of poverty Analyze the distribution of income in the U.S. Summarize government policies intended to combat poverty

Vocabulary Poverty Threshold Poverty Rate

Poverty Threshold – The income level below which income is insufficient to support a family or household. In 2004 – The poverty threshold for a single parent under the age of 63 with one child was $12,490 A family of 4 with 2 children - $18,850

Poverty Rate – The percentage of people who live in households with income below the official poverty level.

Racial and Gender Discrimination Economic Shifts Causes of Poverty Lack of Education Location Racial and Gender Discrimination Economic Shifts Shifts in Family Structure

Income Inequality