1. TYPES OF UNEMPLOYMENT
Frictional
Structural
Seasonal
Cyclical

2. Frictional Unemployment
Occurs when people take time to find a new job
Changing jobs, layoffs, finish school, etc.
Collecting unemployment insurance may increase frictional unemployment

3. Structural Unemployment
Occurs when people’s skills don’t match available jobs.
Causes:
Development of new technology
New Resources
Globalization
Lack of Education

4. Seasonal Unemployment
Occurs as a result of harvest schedules, vacations, or seasonal shifts
Examples:
Golf Course Personnel
Migrant workers in Michigan orchards
Ski Lodge Personnel in Stowe, VT

5. Cyclical Unemployment
Occurs during economic downturns and falls during periods of economic growth
Recessions (people demand fewer goods, people laid off)

6. INFLATION
How do you measure?
Consumer Price Index

7. Consumer Price Index
Determines how much prices are increasing (inflation)
Measures the current price of all goods and compares them to prices from previous years
This is calculated every month by the Bureau of Labor Statistics (BLS)

8. “Market Basket Items” cereal coffee chicken restaurant tuition postage
telephone
computers

9. “Market Basket Items”

10. Calculating the Consumer Price Index
latest “market basket”
(avg of all current prices)
updated prices
CPI =
x 100
base period prices
base period
CPI is set at 100
(2013 prices)
$360
CPI =
x 100
= 180
$200
(prices from )
180
80% increase
100
March CPI Statistics

11. Causes of Inflation Growth of Money Supply Changes in Aggregate Demand
if demand goes up, prices go up
Changes in Aggregate Supply
producers raise prices to meet higher costs

12. (AGGREGATE DEMAND) (AGGREGATE SUPPLY)
More money to spend increases demand
(AGGREGATE DEMAND)
Higher costs (wages) increase prices
(AGGREGATE SUPPLY)

13. POVERTY

14. POVERTY THRESHOLD

15. POVERTY RATES BY GROUP, 2006

16. GROWTH OF WELFARE $927 B 2012 What program (president) started
the true growth of welfare programs?
~ $44,000 for each person in poverty
Lyndon Johnson’s “Great Society”