2. 1. Achieve full employment status - Try to get everyone a job and have them keep that job for extended periods of time 2. Keep prices low - Low inflation

3. 1. Recessions 2. Changing business cycles 3. Job discrimination 4. Changes in technology 5. Inflation 6. Injury/disability 7. Willingness to work

4. 4 Types of unemployment 1. Structural – when workers lack the necessary skills required to do the job. Example – Telephone operators 2. Frictional – workers who are in between jobs and actively looking for a job. Example – A recent college graduate looking for a job in their field

5. 3. Cyclical – Workers that are laid off when the overall economy suffers a downturn Example – A department store clerk is laid off due to poor sales at the store. 4. Seasonal – Workers that lose their jobs due to changes of the season. Example – A lawn-care business closes for the winter season.

6. 1. Create Unemployment assistance 2. Educational Subsidies 3. Job training programs 4. Equal Opportunity Employment Laws 5. Public Service Employment 6. Tax breaks for businesses that hire workers

7.  National Unemployment – 9.4%  Delaware unemployment – 8.8%  “Full Employment” – achieved when there is zero cyclical unemployment…around 4 – 5% unemployment.  Good test question: How can an economist claim the U.S. is at full employment when the unemployment rate is 4.5%?

8.  A rise in prices  Why? – 3 Reasons 1. The Quantity Theory – Too much money in circulation 2. The Demand-Pull Theory – when demand for a product is extremely high, businesses will raise the price of that product to maximize profit. 3. The Cost-Push Theory – when the price of resources increases, businesses raise the price for their products.

9. Prices Inflate Workers get a pay raise to compensate for inflation Increase in wages causes businesses to raise the prices of their goods/services Workers get a pay raise to compensate for inflation Increase in wages causes businesses to raise the prices of their goods/services Wage-Price Spiral