1. Warm Up #35
Why is a summer job so important, especially to students who have just graduated from high school?
Explain in a paragraph to present in front of the class.
(1 paragraph is 5 or more sentences).

2. Scaffold understanding of the standard(s) and/or element(s)
Scaffold understanding of the standard(s) and/or element(s). Paraphrase the standard(s) and/or element(s). Rewrite the standard including synonyms or brief definitions in parentheses and in a different color following the key terms found in step 1.
SSEMA1c,e
c. Define unemployment rate, Consumer Price Index (CPI), inflation (increase in prices), real GDP, aggregate (cumulative) supply and aggregate (cumulative) demand and explain how each is used to evaluate the macroeconomic goals from SSEMA1a.
e. Identify (classify) seasonal (periodic), structural, cyclical (recurring) and frictional unemployment.

3. Facing Economic Challenges
Unemployment in Today’s Economy
SSEM1b&c
c. Define unemployment rate, Consumer Price Index (CPI), inflation real GDP, aggregate supply and aggregate demand and explain how each is used to evaluate the macroeconomic goals from SSEMA1a.
e. Identify seasonal, structural, cyclical and frictional unemployment

4. 5 Key Economic Indicators
Gross Domestic Product (GDP)
The Business Cycle
The Unemployment Rate
Inflation
Consumer Price Index (CPI)

5. Facing Economic Challenges
KEY CONCEPT
Unemployment has a variety of causes. Some levels of unemployment is expected, even when an economy is healthy.
WHY THE CONCEPT MATTERS
As the nation goes through business cycles, it faces the problems of unemployment and inflation. Persistent unemployment can lead to poverty. During periods of inflation, wages buy less.

6. Measuring Unemployment
KEY CONCEPTS
3 things that closing or scaling back by large employers has major impact on are:
i. Unemployed cannot buy as many goods and services
ii. Other local businesses may decrease output, lay off workers
iii. Widespread unemployment across country can reduce production and GDP.
Unemployment rate—percent of labor force jobless and looking for work

7. Measuring Unemployment
The Unemployment Rate
Civilian labor force—people over 16 who are working, looking for work
Bureau of Labor Statistics (BLS) determines unemployment rate
does not count discouraged workers who have stopped looking or the underemployed, students, mentally handicapped, and stay at home parents.

8. Problems with the unemployment rate
Discouraged workers
People who have given up looking for work.
Underemployed
Workers who have jobs beneath their skill level or part-time, who want full-time work

9. The Bureau of Labor Statistics (BLS) Calculates Unemployment Rate
Number of people looking for work
Number of people in the labor force
-_FULL EMPLOYMENT IS 4-6%
Labor Force is the number of people over the age of 16 who would like to work.

10. Unemployment rate of 4 TO 6% considered full employment in U.S.!!
Full employment—in which none of these unemployment are caused by decreased economic activity
Always some degree of unemployment:
people relocate; look for better job; can’t find appropriate job
Unemployment rate of 4 TO 6% considered full employment in U.S.!!
other rates in countries with different labor markets, economic policies

11. Class Assignment Do Figure 13.1 on page 383 U.S. Unemployment Rate
Analyze Graphs
____________

12. Types of Unemployment
KEY CONCEPTS
1. Frictional unemployment—temporary, experienced by people changing jobs
2. Seasonal unemployment—due to seasonal work
3. Structural unemployment—jobs exist but workers not qualified
4. Cyclical unemployment—caused by decreased activity in business cycle

13. Types of Unemployment Type 1: Frictional unemployment
Frictional unemployment not a threat to economic stability. Includes:
Childrearing parents returning to work
New college graduates looking for first job
experienced workers who want to switch jobs
Reflects workers’ freedom to find the best job for them at the highest wage

14. Types of Unemployment Type 2: Seasonal unemployment
Demand for some jobs changes dramatically from season to season
Construction work falls off in winter
tourism peaks at certain times of year; varies by region
migrant farm work drops off in winter; migrant families suffer

15. Types of Unemployment Type 3: Structural unemployment
As businesses become more efficient, require fewer workers
New technologies replace workers or require them to retrain
new industries requiring specialized education do not employ unskilled
change in consumer demand can shift type of workers needed
offshore outsourcing sometimes leaves people out of work

16. Types of Unemployment Type 4: Cyclical unemployment
Employers lay off workers during low points in business cycle
During recession, hard to find new jobs since demand for labor drops
Unemployment period varies by type; average relatively short
over one third of unemployed find work in five weeks or less

17. The Impact of Unemployment
KEY CONCEPTS
Excessive, persistent unemployment inefficient it wastes human resources
Promotes inequality since least experienced lose jobs first
also fewer jobs means fewer opportunities to advance
Discourage workers who lose faith in ability to find good job
underemployed lose motivation to do good work

18. Review for Unemployment Rate
The unemployment rate is the percentage of the work force—people over the age of 16—who are jobless and actively looking for work. • The 4 main kinds of unemployment are frictional unemployment, the temporary joblessness of workers moving from one job to another; structural unemployment, when available jobs do not match up with the skills of available workers; seasonal unemployment, related to jobs that change dramatically from season to season; and cyclical unemployment, caused by a downturn in the business cycle. • Because of frictional unemployment, even in full employment about four to six percent of workers are without jobs. • Unemployment hurts an economy because it is inefficient, not using productive resources fully; it is unequal, affecting the already disadvantaged the most; and it fosters discouragement in workers.

19. Closure Activity #29
If you owned a clothing factory, how would a high rate of unemployment affect your business?
_________________________________________________

20. Show What You Know! Georgia Milestone Questions
Structural unemployment is often caused by
Changing jobs
New technology
Severe recession
Weather changes

21. Show What You Know! Georgia Milestone Questions
People who are unemployed for long periods of time often
Eventually get very high paying jobs
Gradually get more determined to find a job
Lose faith in their ability to get a job
Relocate to areas with low unemployment to find a job

22. The End
Any Questions?
Any Comments?
Any Concerns?

23. Warm Up #36
A person who puts $1000 in a certificate of deposit that earns 5% per year. After 10 years, the CD is worth over $1,600. Has that person gained money in terms of purchasing power? Can the person buy more with the $1600 ten years later than could be bought with the $1000 ten years before?
Explain.

24. Class Confession
We the Senior Class of 2017 will complete ALL of our assignments to the best of our abilities and behave appropriately in class.
We will respect all faculty, staff, substitutes, classmates, especially Mr. Wilcox.
We will graduate on time May 19, 2017 and become productive citizens in society.

25. Scaffold understanding of the standard(s) and/or element(s)
Scaffold understanding of the standard(s) and/or element(s). Paraphrase the standard(s) and/or element(s). Rewrite the standard including synonyms or brief definitions in parentheses and in a different color following the key terms found in step 1.
SSEMA1c,e
c. Define unemployment rate, Consumer Price Index (CPI), inflation (increase in prices), real GDP, aggregate (cumulative) supply and aggregate (cumulative) demand and explain how each is used to evaluate the macroeconomic goals from SSEMA1a.

26. Facing Economic Challenges
Causes and Consequences of Inflation
SSEM1c
c. Define unemployment rate, Consumer Price Index (CPI), inflation real GDP, aggregate supply and aggregate demand and explain how each is used to evaluate the macroeconomic goals from SSEMA1a.

27. 5 Key Economic Indicators
Gross Domestic Product (GDP)
The Business Cycle
The Unemployment Rate
Inflation
Consumer Price Index (CPI)

28. What Is Inflation and How Is It Measured?
KEY CONCEPTS
Inflation—defined two ways
i. Sustained rise in the level of prices generally
ii. Sustained fall in the purchasing power of money

29. What Is Inflation and How Is It Measured?
Consumer Price Index
Measures changes in prices of goods & services commonly purchased by CONSUMERS!
U.S. government surveys people to learn what they buy regularly
Creates a “market basket” of about 400 typical products
each month researches current prices of these items
compares prices to reference base, years 1982 to 1984

30. What Is Inflation and How Is It Measured?
This is when Producers experience its own inflation.
Producer Price Index (PPI)
Measures changes in wholesale prices
Reflects prices producers get for goods
PPI tends to lead CPI as indicator of inflation

31. Types of Inflation Negligible
Less than 1 percent per year; very small insignificant amount
Stagflation
High inflation and high unemployment occurring simultaneously
Moderate rate of inflation—
between 1 and 3 percent per year
Creeping inflation—
moderate inflation over a period of time
Galloping inflation—
rapid increase
Hyperinflation—
over 50 percent per year
Deflation—
decrease in general price level; happens rarely

32. What Causes Inflation?
KEY CONCEPTS
Demand-pull inflation—total demand rises faster than production
Cost-push inflation—increases in production costs push up prices

33. What Causes Inflation?
Demand-Pull inflation
If total demand rises faster than production, it creates scarcity
producers need time to recognize demand, gear up for higher production
during lag period, demand pushes up prices for available products
Too much money printed during lag period will drive prices up

34. What Causes Inflation? Cost-Push Inflation
When production costs increase, producers make less profit
if demand is strong, may raise prices to maintain profits
Cost-push inflation may be due to higher price of materials, energy
Wages can be large part of production costs; wage-price spiral:
higher wages lead to higher costs, which lead to higher prices, which lead to higher wages

35. What Is the Impact of Inflation?
KEY CONCEPTS
Since 1960s, inflation has had significant impact on U.S. economy
limited stock market growth, increased agricultural bankruptcies
For individuals and economy as a whole
reduced purchasing power of the dollar
raised interest rates

36. Review for Inflation
Inflation is a sustained rise in the level of prices or a sustained fall in purchasing power. The Consumer Price Index and Producer Price Index are two popular measures of inflation. • Demand-pull inflation results when total demand rises faster than the production of goods and services. Cost-push inflation results when increases in the costs of production push up prices. Rising wages and prices can create a wage-price spiral that pushes inflation higher. • Inflation leads to declining purchasing power, rising interest rates, and decreasing returns on savings, eroding economic stability.

37. Show What You Know! Georgia Milestone Questions
The Great Depression came to an end when
bank failures stopped
New Deal legislation went into effect
the government cut back spending
the United States entered World War

38. Show What You Know! Georgia Milestone Questions
When prices rose at a rate of about 322 percent per month in Germany in the 1920s, the German economy experienced
creeping inflation
deflation
galloping inflation
hyperinflation

39. The End
Any Questions?
Any Comments?
Any Concerns?

40. Definitions Quiz & Test Tomorrow!
Unemployment rate
Underemployed
Full employment
Frictional unemployment
Seasonal unemployment
Structural unemployment
Cyclical unemployment
Efficiency
Inequality
Discouraged workers
Outsourcing
Inflation
CPI
PPI
Inflation rate
Hyperinflation
Deflation
Demand-pull inflation
Cost-push inflation
Wage-price spiral
Market basket