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Lecture 13 unemployment
This document provides an overview of macroeconomics topics related to unemployment, including different types of unemployment (frictional, seasonal, structural), the natural rate of unemployment, cyclical unemployment, unemployment insurance, minimum wage laws, unions, and efficiency wages. It also defines key terms, provides examples to illustrate concepts, and includes review questions.
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Lecture 13 unemployment
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- 4. 1.Are you includedin the labor force? 2. If 300 people are unemployed and the unemployment rate is 6%, how many people are employed? 3.What is the labor force participation rate in the U.S.? 4. If I am unemployed and become a discouraged worker, what happens to the unemployment rate? 5. Over the past 70 years has the labor force participation rate increased for decreased for men? Quiz 4 Name__________ No 5,000 63% Goes down Decreased
- 5. Natural Rate of Unemployment Thenormal rate of unemployment around which the unemployment rate fluctuates
- 6. Cyclical Unemployment The deviation of unemploymentfrom its natural rate
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- 9. Frictional Time to finda new job
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- 13. Structural Too many workers Changein demand for skills
- 15. What kind of unemployment iscaused by smartphones?
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- 18. Unemployment Insurance Government program to provideincome when workers become unemployed
- 19. Unemployment Insurance Unintended Consequence Moral Hazard Mayprolong unemployment
- 20. Why are wagestoo high? Minimum wage laws Unions Efficiency Wages
- 21. Minimum Wage Laws Governmentsets a minimum wage that can legally be paid
- 22. $0 $5 $10 $15 $20 0 10 2030 40 50 60 Supply Demand Wage Workers Equilibrium Wage 30 workers 30 jobs no unemployment Minimum Wage 40 workers 20 jobs 20 unemployed workers Minimum Wage 20 workers get a raise 10 workers lose job 10 new unemployed workers Minimum Wage
- 23. Unemployment Insurance a government program thatpays people when they become unemployed
- 24. Union Worker association that negotiateswith employers over wages, benefits, and conditions
- 25. Union One contract forall employees Strike Conflicts between workers
- 26. Efficiency Wages Higher wagesmake more productive employees
- 27. Efficiency Wages Employee WagePizzas Productivity Wage per Pizza Bob $10 5 $2.00 Bill $20 12 $1.67
- 28. Efficiency Wages More Healthy LowerTurnover Higher Quality More Effort
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- 31. Key Terms money medium ofexchange unit of account store of value liquidity commodity money fiat money currency demand deposits central bank money supply monetary policy reserves fractional-reserve banking reserve ratio money multiplier bank capital leverage leverage ratio capital requirement open-market operations discount rate reserve requirements
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- 33. Barter Direct trade -stuff for stuff No money Double coincidence of wants
- 34. Both sides haveto want what the other side has Double coincidence of wants
- 35. Both must wantwhat the other has at the same time Double coincidence of wants
- 36. Money makes tradeeasier
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- 38. Money Something people useto trade with
- 42. Why would youaccept a cigarette if you didn’t smoke?
- 44. Functions of Money Mediumof exchange Unit of account Store of value