1. Macro Goals

2. Recall goals of Macro Economic Growth – measured by GDP Full Employment – Measured by unemployment rate Price Stability – measured by inflation

3. Full Employment Measured by calculating unemployment Unemployment = the amount of people ACTIVELY seeking employment, but aren’t employed. Typically a healthy % of unemployed would be 3-4% - Full employment is impossible Labor Force – anyone 16yrs+ who HAS or is SEEKING a job

4. Labor Force Who is included? Anyone 16 + that is actively looking for work People who were laid off and looking College students trying to find work Someone who quit their job to search for another People who are currently employed Who is NOT included People who gave up looking (can cause the unemployment rate to be skewed) Stay at home parents Students who are living off parent’s dime

5. Four types of Unemployment There are four different reasons for unemployment Some types of unemployment are expected Some types the gov’t can help prevent by creating programs Some types are very harmful and hurt the economy

6. Four Types of Unemployment 1. Frictional Unemployment = This is the unemployment that occurs during TIME spent looking for a job This type of unemployment is usually temporary Is an expected type of unemployment (not preventable) Ex – time between graduating college and looking for first job Time spent finding a new job after a previous job Time spent researching options Not seen as very harmful – part of that 3-4% expected unemployment

7. Four types of Unemployment 2. Seasonal = unemployment that occurs based off weather or seasons Usually temporary This is an expected form of unemployment – predictable that the farmer cannot work during winter Not seen as very harmful if it follows yearly trends – prolonged seasonal unemployment may cause concern (drought) Part of that 3-4% expected unemployment Ex: Construction Farming

8. Four types of Unemployment 3.Structural Unemployment = when workers’ skills do not match jobs available – example you are an expert at cursive writing, but now computers dominate and you cannot find any hand writing jobs Five major reasons for Structural 1. – Technology 2 – New Resources 3. – Change in consumer demand 4. – Globalization 5.- Lack of Education Structural Unemployment is seen as preventable and a need for government to step in Can be harmful if not corrected

9. Four Types of Unemployment 4. Cyclical Unemployment = occurs during an economic downturn Economy is probably in a recession Seen as most harmful Government must step in to boost business confidence in hiring.

10. Underemployed When you are employed, but not meeting your full potential Examples You have a Doctorate, but are working at Taco Bell You are a trained sharp shooter, but work at the pawn shop

11. How do we calculate the unemployment rate Unemployment rate is the % of people unemployed in the labor force Equation Unemployment Rate = # of people Unemployed X 100 # of people in the Labor force Remember Unemployed = # of people seeking a job but cannot find one Labor Force = Anyone 16yrs + who HAS or is SEEKING a job (employed + unemployed)

12. Calculating unemployment Ex: Labor Force = 500 Unemployed = 100 Unemployment Rate = _________________ Ex: Employed = 1,000 Unemployed = 200 Labor Force = __________________ Unemployment Rate = _________________