Employment And Unemployment Instructor: Xi Wang
|
|
- Nathan Norman Wilkinson
- 6 years ago
- Views:
Transcription
1 Oct, 2016 Employment And Unemployment Instructor: Xi Wang
2 Does Employment Status Matter? Yes! Recall that Production=Expenditure=Income? For the income, 2/3 of it is labor income It means that most of our income comes from our job!!! Employment Matters?
3 Does Employment Status Matter? Example What happens in The Great Depression Unemployed
4 Does Employment Status Matter? Example What happens in The Great Depression? Dorothea Lange's Migrant Mother depicts destitute pea pickers in California, centering on Florence Owens Thompson, age 32, a mother of seven children, in Nipomo, California, March 1936
5 Does Employment Status Matter? Employment Matters? Yes! Then next question is how to Measure: Q:How shall we measure unemployment or employment status of our economy? Unemployment rate- To measure what is the fraction of people get employed. A fraction of what kind of people? Whole population?
6 Does Employment Status Matter? Does it make sense to check what is the fraction out of our whole population get employed or unemployed? No! Since not all of these people are willing to or able to work. Motivation of unemployment rate is to Measure tightness of labor market So only the people stay in this market is our concern------labor force.
7 Employment and Unemployment, Measurement What is Labor force? Those people who wants and is eligible to work, even though he may not have a job yet. Number of Unemployed +Number of Employed = Labor force Labor force+ not willing or able to work(not in labor force)= Potential workers Potential workers: civilian non-institutional population ages 16 and over; Hence children under 16 years of age, people on active duty in the military, and institutionalized people(in Jail or nursing house) are not Potential workers.
8 Labor force, not labor force: An example People got retired----not in labor force People aged 20 still in college, not in labor force Jim quits his previous job, now is still searching a new one. Jim is in the labor force, but unemployed John is working, John is in the labor force, and employed.
9 Employment and Unemployment, Measurement Why don't we just use quantity of employed to measure market tightness? Not comparable cross countries and time vunemployment rate Unemployment rate Unemployment rate Unemployed Labor Force Unemployed Unemployed Employed
10 Employment and Unemployment, Measurement Labor force participation rate Labor Force Potential Workers Unemployment rate is a measure of Labor market tightness. It can serve as a index for our aggregate economy : How does unemployment rate move cross time? By cross time, people generally mean across recessions and booms
11 Employment and Unemployment, Measurement Labor Force Labor force participation rate Potential Workers How does unemployment rate move cross time? Notes: Grey area means recession
12 Employment and Unemployment, Pattern 1 Any Pattern? (1)When the overall economy suffers a recession a period in which GDP falls the unemployment rate tends to rise. So unemployment rate negatively correlated with GDP growth The Great Depression of the 1930s, for example (2) Unemployment rate is never close to zero, lower bound 4 percent.
13 Employment and Unemployment, Pattern 2 Who gets Unemployed? High educated and middle aged tend to have lower unemployed rate Explanation?
14 Kinds of unemployment rate: Natural unemployment rate The natural rate of unemployment is the rate around which the actual rate of unemployment fluctuates You can imagine n.r.u is close to the mean of unemployment rate. Cyclical unemployment is defined as the deviation of the unemployment rate from its natural rate(driving force of this unemployment is Business cycle) Example: if n.r.u=6%, now our u.r=8% then c/u=8%-6%=2%
15 Kinds of unemployment rate Frictional Unemployment: short run in nature; consists of those temporarily between jobs. i.e Job searching---asymmetric information Structural Unemployment: results from deep-rooted conditions & fundamental changes in our economy. i.e job dismatching Cyclical Unemployment: this is the type that arises as a result of our economic instability/business cycles. Difference between current unemployment rate and Natrual rate
16 Natural unemployment rate, Full employment Recall our pattern of unemployment, never hit zero In a market-based economy, there will always be some unemployment, it may comes from structual unemployment or frictional unemployment (Recall definition?)--- These unemployment is healthy, so we tend to think that nature unemployment is the best status. --- Full employment means natural unemployment rate is attained. Cyclical unemployment? Recall the pattern of unemployment? Negatiely correlated with GDP growth!
17 Read Quiz 3 Labor Market : Demand and Supply analysis- Can we explain unemployment?
18 Labor Market, Demand What is the fundermental Property of Demand Curve? Downward sloping! Demand curve is a result of Optimization process of buyer! Who is going to purchase labor? Firms!
19 Labor Market, Demand Number of workers hired Total Cost ($) wage rate: $4/person Total Benefit ($) Net Benefit ($) Marginal Cost Marginal Benefit
20 Labor Market, Demand: MC=MB? Number of workers hired Total Cost ($) wage rate: $4/person Total Benefit ($) Net Benefit ($) Marginal Cost Marginal Benefit
21 Labor Market, Demand What is the fundermental Property of Demand Curve? Why do we have downward sloping demand curve for labor? Diminishing marginal product of labor : each additional worker creates less marginal output than the workers who were hired before; Why? Exhaust your favorite Principle; Value of the marginal product of labor: market value of a worker s marginal product
22 Labor Market, Demand Shift
23 Labor Market, Demand
24 Labor Market, Supply What is the general property of supply curve? Upward sloping! Optimization of Supplyer! Who is providing labor to our market? What is their Optimization process?
25 Labor Market, Supply, Two dimension: How Many? How many hours you would like to work given the wage? Is there any concern when you decide how many hours to work? Yes! More working time means less family time, less trips, less parties So you need to balance the time of work and Leisure. Since We are Lazy!!!
26 Labor Market, Supply, Two dimension : How Many? Let's use a illustrating way to look at labor supply: Recall again: What is the normal demand curve looks like? Downward sloping! Since Diminishing marginal Benefit Now, for example. You have 24 hours per day, you need 8 hours sleep, 1 hour for meals
27 Labor Market, Supply, Two dimension : How Many? Now, for example. You have 24 hours per day, you need 8 hours sleep, 1 hour for meals Hence you have 15 hours to work at most! What if you decide to work 7 hours? What if you decide to consume 8 hours leisure? What do I mean we are lazy? It means leisure is a good, you want to consume it!
28 Labor Market, Supply, Two dimension : How Many? What is the price of Leisure then? (Hint: Price is cost, what is the cost of leisure?) If Leisure is a normal goods, will you consume less when the price is higher? Ok, if you consume less leisure, what does it mean? Labor supply
29 Labor Market, Supply, Two dimension : How Many? 15-Leisure= Working hours Leisure 15-Leisure wage wage
30 Labor Market, Supply, Two dimension : Yes or No? Question: Is working hour negotiable? In most scenario, it is not; 8 hours, 5 days, take it or leave it So our previous analysis seems a little problematic, since it is almost impossible to adjust Working hours! Does No Negotiation changes our results stating that labor supply is upward sloping? Answer is no, it will not change our result. Question: Can people make choice in current setting? Yes, take it or leave it!
31 Labor Market, Supply, Two dimension : Yes or No? Reservation wage; Given that working schedule is fixed. A typical labor contract would looks like: 8 hours, 5 days + a wage rate. What we can observe is whether people accept this arrangement or not. Just like our grading schedule, for example: You will not see 100, 99.9 or 85.5 as final grading You grading would be A, B, C, D
32 Labor Market, Supply, Two dimension : Yes or No? You grading would be A, B, C, D For example: would be A ; All grades ranges below 87(including 87) will be assigned grade Not A Then 88 or 87 would be a threshold. Above threshold Means something. Below threshold means something else.
33 Labor Market, Supply, Two dimension : Yes or No? Similar here; People will have a reservation wage in her mind Reservation wage is a threshold. If your wage rate lies below this reservation wage, you will reject this offer If your wage rate lies above, you will accept this offer Remember our auction example? It also has the same idea.
34 Labor Market, Supply, Two dimension : Yes or No? Given a group of people, they have reservation wage, say, monthly $800, $1000, $1100, $1200, $1500 How many of them are to accept my wage rate $700? How about $900? 1000?1200? Hence what is the property of labor supply curve?
35 Labor Market, Supply Shift Changing tastes; M1: Say you become super lazy, you love leisure. Demand for Leisure shift right---- Labor supply shift left; M2: You love leisure, so your reservation will move up Changing opportunity cost of time. Changi opportunity cost will have the similar effect. Since changing opportunity cost have implication of your evaluation to leisure. Changes in population. M1: You have more supply to aggregate up; M2: You get more people staying in The pool
36 Equilibrium,Do We have unemployment?
37 Labor Market, Equilibrium Our motivation of this Demand and supply analysis is to analyze unemployment But There will be no unemployment in Equilibrium, If we only use simple Demand and supply analysis. As we emphasized serveral times, Model is only a simplification If we cannot explain the pattern in data, we must have oversimplified something-- - Searching, Matching
38 Labor Market, Why there is unemployment, Friction Part (1) Some workers who are only willing to work for a wage above the market-clearing wage, Think about our reservation case. (2) Or Worker need to find where the jobs locate, we need to do job-hunting Information friction (3) Firms need different labor.---matching friction, Structual unemployment Frictional unemployment is the unemployment resulting from imperfect information about available jobs and from the time-consuming process of job search.
39 Why Is There FRICTIONAL Unemployment? The matching of job seekers to employers is not instantaneous. Firms do not have complete information on the skills, experiences, and preferences of job seekers. Job seekers do not have complete information on the specifics of each job opening.
40 Labor Market, Why there is unemployment, Market Part Wage rigidity, downward wage rigidity For example: Labor Contract Minimum Wage law Union(the threat of going on strike) Efficiency wages(book reading!)
41 Wage rigidity, Distribution of Wage changes in Big firms
42 Labor Market, Why there is unemployment, Market Part Price will lie above equilibrium Price Quantity of labor supplied persistently exceeds the quantity of labor demanded----structural unemployment
43 Book Reading P Quiz 3
Employment And Unemployment Instructor: Xi Wang
30th June, 2016 Employment And Unemployment Instructor: Xi Wang Does Employment Status Matter? Yes! Recall that Production=Expenditure=Income? For the income, 2/3 of it is labor income It means that most
More informationEmployment And Unemployment Instructor: Xi Wang
Spring, 2017 Employment And Unemployment Instructor: Xi Wang RoadMap Introduction Concepts and Definition Pattern Explain Does Employment Status Matter? Yes! Recall that Production=Expenditure=Income?
More informationUnemployment: Jones Chapter 7
Unemployment: Jones Chapter 7 Alan G. Isaac American University June 4, 2010 It s a recession when your neighbor loses his job; it s a depression when you lose yours. Harry Truman, as quoted in Jones (2008)
More informationLecture 22. Aggregate demand and aggregate supply
Lecture 22 Aggregate demand and aggregate supply By the end of this lecture, you should understand: three key facts about short-run economic fluctuations how the economy in the short run differs from the
More informationECONOMY IN THE LONG RUN. Chapter 6. Unemployment. October 23, Chapter 6: Unemployment. ECON204 (A01). Fall 2012
ECONOMY IN THE LONG RUN Chapter 6 Unemployment October 23, 2012 1 Topics in this Chapter Focus on the Long run unemployment rate Natural Rate of Unemployment contrast with cyclical behaviour of unemployment
More informationAggregate Supply and Aggregate Demand
Aggregate Supply and Aggregate Demand ECO 301: Money and Banking 1 1.1 Goals Goals Specific Goals Be able to explain GDP fluctuations when the price level is also flexible. Explain how real GDP and the
More informationMacroeconomics. Aggregate Demand and Aggregate Supply. Introduction. In this chapter, look for the answers to these questions: N.
C H A T E R 15 Aggregate Demand and Aggregate Supply B R I E F R I N C I L E S O F Macroeconomics N. Gregory Mankiw remium oweroint Slides by Ron Cronovich 2010 South-Western, a part of Cengage Learning,
More informationQuiz I Topics in Macroeconomics 2 Econ 2004
Quiz I Topics in Macroeconomics 2 Econ 2004 You have 35 min to complete the quiz. Please write the letter of your answer choice in the space provided on this COLOURED FRONT SHEET!. Clearly write your name
More informationIntroduction. Aggregate Demand and Aggregate Supply. In this chapter, look for the answers to these questions:
33 Aggregate Demand and Aggregate Supply R I N C I L E S O F ECONOMICS FOURTH EDITION N. GREGOR MANKIW remium oweroint Slides by Ron Cronovich 2008 update 2008 South-Western, a part of Cengage Learning,
More informationECON Drexel University Summer 2008 Assignment 2. Due date: July 29, 2008
ECON 202-001 Drexel University Summer 2008 Assignment 2 Due date: July 29, 2008 Instructor: Yuan Yuan Name This homework has up to 10 points bonus. Question 1 (40 points, 2 points each): MULTIPLE CHOICE.
More informationIntroduction. Over the long run, real GDP grows about 3% per year on average.
Introduction Over the long run, real GDP grows about 3% per year on average. In the short run, GDP fluctuates around its trend. Recessions: periods of falling real incomes and rising unemployment Depressions:
More informationMacro CH 29 sample questions
Class: Date: Macro CH 29 sample questions Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The relationship between real GDP and potential GDP over the
More informationUnemployment and its natural rate. Chapter 27
1 Unemployment and its natural rate Chapter 27 What we learn in this chapter? This is the last chapter of Part IX: the real economy in the long run In Chapter 24 we established the link between production,
More informationReview: Markets of Goods and Money
TOPIC 6 Putting the Economy Together Demand (IS-LM) 2 Review: Markets of Goods and Money 1) MARKET I : GOODS MARKET goods demand = C + I + G (+NX) = Y = goods supply (set by maximizing firms) as the interest
More informationEmployment and Unemployment
Employment and Unemployment What kind of job market will you enter when you graduate? The class of 2014 had a tough time: In July 2014, 10 million Americans wanted a job but couldn t find one and 8 more
More informationQuiz I Topics in Macroeconomics 2 Econ 2004
Quiz I Topics in Macroeconomics 2 Econ 2004 You have 35 min to complete the quiz. Please write the letter of your answer choice in the space provided on this COLOURED FRONT SHEET!. Clearly write your name
More informationChapter 9 The IS LM FE Model: A General Framework for Macroeconomic Analysis
Chapter 9 The IS LM FE Model: A General Framework for Macroeconomic Analysis The main goal of Chapter 8 was to describe business cycles by presenting the business cycle facts. This and the following three
More informationa. Fill in the following table (you will need to expand it from the truncated form provided here). Round all your answers to the nearest hundredth.
Economics 102 Summer 2015 Answers to Homework #4 Due Monday, July 13, 2015 Directions: The homework will be collected in a box before the lecture. Please place your name on top of the homework (legibly).
More information10. Oferta y demanda agregada
10. Oferta y demanda agregada In this chapter, look for the answers to these questions: What are economic fluctuations? What are their characteristics? How does the model of aggregate demand and aggregate
More informationAggregate Demand and Aggregate Supply
Aggregate Demand and Aggregate Supply Chapter 19 Copyright 2001 by Harcourt, Inc. All rights reserved. Requests for permission to make copies of any part of the work should be mailed to: Permissions Department,
More informationPutting the Economy Together
Putting the Economy Together Topic 6 1 Goals of Topic 6 Today we will lay down the first layer of analysis of an aggregate macro model. Derivation and study of the IS-LM Equilibrium. The Goods and the
More informationINFLATION, JOBS, AND THE BUSINESS CYCLE*
Chapt er 12 INFLATION, JOBS, AND THE BUSINESS CYCLE* Key Concepts Inflation Cycles1 In the long run inflation occurs because the quantity of money grows faster than potential GDP. Inflation can start as
More informationMacroeconomics, Spring 2007, Final Exam, several versions, Early May
Name: _ Days/Times Class Meets: Today s Date: Macroeconomics, Spring 2007, Final Exam, several versions, Early May Read these Instructions carefully! You must follow them exactly! I) On your Scantron card
More informationArchimedean Upper Conservatory Economics, November 2016 Quiz, Unit VI, Stabilization Policies
Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The federal budget tends to move toward _ as the economy. A. deficit; contracts B. deficit; expands C.
More informationMacroeonomics. 20 this chapter, Aggregate Demand and Aggregate Supply. look for the answers to these questions: Introduction. N.
C H A T E R In 20 this chapter, look for the answers to these questions: Aggregate Demand and Aggregate Supply R I N C I L E S O F Macroeonomics N. Gregory Mankiw remium oweroint Slides by Ron Cronovich
More informationAggregate Demand and Aggregate Supply
C H A P T E R 33 Aggregate Demand and Aggregate Supply Economics P R I N C I P L E S O F N. Gregory Mankiw Premium PowerPoint Slides by Ron Cronovich 2009 South-Western, a part of Cengage Learning, all
More informationReview Questions for Econ1101 Final, Part 1
Review Questions for Econ1101 Final, Part 1 SHORT ANSWER. Write the word or phrase that best completes each statement or answers the question. 1) Define opportunity cost. A student who has just graduated
More informationAP Macroeconomics Unit 2: Measurement of Economic Performance 2-5. Unemployment. Unemployment
1 Unemployment Business, Computers, & Information Technology Unit 2 Chapter 26 Review Identify the following: 1. What phase of the Business Cycle is the U.S. in? 2. What was the U.S. Real GDP Growth Rate
More informationL K Y Marginal Product of Labor (MPl) Labor Productivity (Y/L)
Economics 102 Summer 2017 Answers to Homework #4 Due 6/19/17 Directions: The homework will be collected in a box before the lecture. Please place your name, TA name and section number on top of the homework
More informationLesson 11 Aggregate demand and Aggregate Supply
Lesson 11 Aggregate demand and Aggregate Supply Henan University of Technology Sino-British College Transfer Abroad Undergraduate Programme 0 In this lesson, look for the answers to these questions: What
More information1 Figure 1 (A) shows what the IS LM model looks like for the case in which the Fed holds the
1 Figure 1 (A) shows what the IS LM model looks like for the case in which the Fed holds the money supply constant. Figure 1 (B) shows what the model looks like if the Fed adjusts the money supply to hold
More informationTradeoff Between Inflation and Unemployment
CHAPTER 13 Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment Questions for Review 1. In this chapter we looked at two models of the short-run aggregate supply curve. Both models
More informationVII. Short-Run Economic Fluctuations
Macroeconomic Theory Lecture Notes VII. Short-Run Economic Fluctuations University of Miami December 1, 2017 1 Outline Business Cycle Facts IS-LM Model AD-AS Model 2 Outline Business Cycle Facts IS-LM
More informationMONITORING JOBS AND INFLATION*
Chapt er 5 MONITORING JOBS AND INFLATION* Key Concepts Employment and Unemployment Unemployment is a problem for both the unemployed worker and for society. Unemployed workers lose income and, if prolonged,
More informationMULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
Exam - Version A Name 1) Full-employment output is: A) the level of output that is produced when there is no voluntary unemployment. B) the level of output that is produced when the unemployment rate is
More informationMacroeconomic Analysis Econ 6022
1 / 36 Macroeconomic Analysis Econ 6022 Lecture 10 Fall, 2011 2 / 36 Overview The essence of the Keynesian Theory - Real-Wage Rigidity - Price Stickiness Justification of these two key assumptions Monetary
More informationDunbar s Big Review Sheet AP Macroeconomics Exam Content Area [Hubbard Textbook pages] (percentage coverage on AP Macroeconomics Exam) I.
Dunbar s Big Review Sheet AP Macroeconomics Exam Content Area [Hubbard Textbook pages] (percentage coverage on AP Macroeconomics Exam) I. Basic Economic Concepts (8-12%) Three Fundamental Questions [8]:
More informationMacroeconomics I Exam Revision. Part A: Week Four Economic Growth Based on Week Three Lectures [Also refer to Chapter 20]
Macroeconomics I Exam Revision Part A: Week Four Economic Growth Based on Week Three Lectures [Also refer to Chapter 20] Section 1: Lecture One 1. What is the difference between nominal GDP and real GDP?
More informationII. Determinants of Asset Demand. Figure 1
University of California, Merced EC 121-Money and Banking Chapter 5 Lecture otes Professor Jason Lee I. Introduction Figure 1 shows the interest rates for 3 month treasury bills. As evidenced by the figure,
More informationEconomic Growth, Business Cycles, Unemployment, and Inflation
CHAPTER 24 Economic Growth, Business Cycles, Unemployment, and Inflation Remember that there is nothing stable in human affairs; therefore avoid undue elation in prosperity, or undue depression in adversity.
More informationChapter 9 Introduction to Economic Fluctuations
Chapter 9 Introduction to Economic Fluctuations facts about the business cycle how the short run differs from the long run an introduction to aggregate demand an introduction to aggregate supply in the
More informationEconomics 102 Discussion Handout Week 14 Spring Aggregate Supply and Demand: Summary
Economics 102 Discussion Handout Week 14 Spring 2018 Aggregate Supply and Demand: Summary The Aggregate Demand Curve The aggregate demand curve (AD) shows the relationship between the aggregate price level
More informationObjectives of Macroeconomics ECO403
Objectives of Macroeconomics ECO403 http//vustudents.ning.com Actual budget The amount spent by the Federal government (to purchase goods and services and for transfer payments) less the amount of tax
More information10 AGGREGATE SUPPLY AND AGGREGATE DEMAND* Chapt er. Key Concepts. Aggregate Supply1
Chapt er 10 AGGREGATE SUPPLY AND AGGREGATE DEMAND* Aggregate Supply1 Key Concepts The aggregate supply/aggregate demand model is used to determine how real GDP and the price level are determined and why
More information14.02 Quiz #2 SOLUTION. Spring Time Allowed: 90 minutes
*Note that we decide to not grade #10 multiple choice, so your total score will be out of 97. We thought about the option of giving everyone a correct mark for that solution, but all that would have done
More information1. Unemployment rate
1. Unemployment rate Important rates in an economy: interest rate, exchange rate, inflation rate, and unemployment rate. Employment = number of people having a job. Unemployment = number of people not
More informationI. The Money Market. A. Money Demand (M d ) Handout 9
University of California-Davis Economics 1B-Intro to Macro Handout 9 TA: Jason Lee Email: jawlee@ucdavis.edu In the last chapter we developed the aggregate demand/aggregate supply model and used it to
More informationUnemployment CHAPTER. Goals. Outcomes
CHAPTER 28 Unemployment Goals in this chapter you will Learn about the data used to measure the amount of unemployment Consider how unemployment arises from the process of job search Consider how unemployment
More informationExpansions (periods of. positive economic growth)
Practice Problems IV EC 102.03 Questions 1. Comparing GDP growth with its trend, what do the deviations from the trend reflect? How is recession informally defined? Periods of positive growth in GDP (above
More information7) What is the money demand function when the utility of money for the representative household is M M
1) The savings curve is upward sloping, because (a) high interest rates increase the future returns that households obtain from their savings. (b) high interest rates increase the opportunity cost of consuming
More informationECON 3010 Intermediate Macroeconomics Final Exam
ECON 3010 Intermediate Macroeconomics Final Exam Multiple Choice Questions. (60 points; 3 pts each) 1. The returns to scale in the production function YY = KK 0.5 LL 0.5 are: A) decreasing. B) constant.
More information11 EXPENDITURE MULTIPLIERS* Chapt er. Key Concepts. Fixed Prices and Expenditure Plans1
Chapt er EXPENDITURE MULTIPLIERS* Key Concepts Fixed Prices and Expenditure Plans In the very short run, firms do not change their prices and they sell the amount that is demanded. As a result: The price
More information5 MONITORING CYCLES, JOBS, AND THE PRICE LEVEL* Chapter. Key Concepts
Chapter 5 MONITORING CYCLES, JOBS, AND THE PRICE LEVEL* Key Concepts The Business Cycle The periodic but irregular up-and-down movement in production and jobs is the business cycle. Business cycles have
More informationPART XII: SHORT-RUN ECONOMIC FLUCTUATIONS AGGREGATE DEMAND AND AGGREGATE SUPPLY. Chapter 33
1 PART XII: SHORT-RUN ECONOMIC FLUCTUATIONS AGGREGATE DEMAND AND AGGREGATE SUPPLY Chapter 33 What did we learn so far? Macroeconomics studies the economy as a whole It aims to explain economic events that
More informationBusiness Cycles. (c) Copyright 1999 by Douglas H. Joines 1. Module Objectives. What Are Business Cycles?
Business Cycles Module Objectives Know the causes of business cycles Know how interest rates are determined Know how various economic indicators behave over the business cycle Understand the benefits and
More informationIntroduction to Economic Fluctuations
Chapter 9 Introduction to Economic Fluctuations slide 0 In this chapter, you will learn facts about the business cycle how the short run differs from the long run an introduction to aggregate demand an
More informationChapter 3. Productivity, Employment
Chapter 3 Productivity, Output, and Employment Chapter Outline The Production Function The Demand for Labor The Supply of Labor Labor Market Equilibrium Unemployment Relating Output and Unemployment: Okun
More informationPrinciples of Macroeconomics December 17th, 2005 name: Final Exam (100 points)
EC132.02 Serge Kasyanenko Principles of Macroeconomics December 17th, 2005 name: Final Exam (100 points) This is a closed-book exam - you may not use your notes and textbooks. Calculators are not allowed.
More informationMODERN LABOR ECONOMICS THEORY AND PUBLIC POLICY
MODERN LABOR ECONOMICS THEORY AND PUBLIC POLICY 12 TH EDITION CHAPTER 2 Overview of the Labor Market Chapter Outline The Labor Market: Definitions, Facts, and Trends The Labor Force and Unemployment Industries
More informationObjectives for Class 26: Fiscal Policy
1 Objectives for Class 26: Fiscal Policy At the end of Class 26, you will be able to answer the following: 1. How is the government purchases multiplier calculated? (Review) How is the taxation multiplier
More informationAggregate Demand and Aggregate Supply. Chapter Objectives. AD AS Model
10 Demand and Supply 10-1 Chapter Objectives Demand and the Factors That Cause it to Change. Supply and the Factors That Cause it to Change. How AD and AS Determine an Economy s and the Level of Real GDP.
More information13 EXPENDITURE MULTIPLIERS: THE KEYNESIAN MODEL* Chapter. Key Concepts
Chapter 3 EXPENDITURE MULTIPLIERS: THE KEYNESIAN MODEL* Key Concepts Fixed Prices and Expenditure Plans In the very short run, firms do not change their prices and they sell the amount that is demanded.
More informationActual unemployment can be divided into three categories. The first two define natural unemployment.
5. Unemployment rate 1. Unemployment rate and participation rate Definition 1.1. Employment is the number of people having a job. Unemployment is the number of people not having a job but looking for one.
More informationProfessor Christina Romer SUGGESTED ANSWERS TO PROBLEM SET 5
Economics 2 Spring 2018 Professor Christina Romer Professor David Romer SUGGESTED ANSWERS TO PROBLEM SET 5 1.a. The change in the marginal tax rate that households pay will affect their labor supply. Recall
More informationThe aggregate supply curve shows the relationship between the aggregate price level and the quantity of aggregate output in the economy.
Chapter 32 The aggregate supply curve shows the relationship between the aggregate price level and the quantity of aggregate output in the economy. GDP Deflator can be used as a measure of the price level
More informationFinal Exam Macroeconomics Winter 2011 Prof. Veronica Guerrieri
Final Exam Macroeconomics Winter 2011 Prof. Veronica Guerrieri Name (print): Name (signature): Section Registered (circle one): T 1:30 T 6:00 W 1:30 As always, the honor code rules are in effect. You know
More informationPAGE ONE Economics CLASSROOM EDITION. Making Sense of Unemployment Data
CLASSROOM EDITION An informative and accessible economic essay with a classroom application. Includes the full version of Page One Economics, plus questions for students and an answer key for classroom
More informationThe New Normative Macroeconomics
The New Normative Macroeconomics This lecture examines the costs and trade-offs of output and inflation in the short run. Five General Principles of Macro Policy Analysis A. When making decisions, people
More informationName: 3. Be concise in Part III but do not omit your calculation steps, as it is more likely to get a partial credit for an incorrect answer
Midterm 1 Name: CODE OF HONOR PLEDGE: I will not give or receive aid on this examination. I understand that if I am aware of cheating on this exam, I have an obligation to inform the instructor. I also
More informationIntermediate Macroeconomics
Intermediate Macroeconomics Lecture 9 - Government Expenditure & Taxes Zsófia L. Bárány Sciences Po 2011 November 9 Data on government expenditure government expenditure is the dollar amount spent at all
More informationWhat is Macroeconomics?
MACRO ECONOMICS 1 What is Macroeconomics? Macroeconomics is the study of the large economy as a whole. It is the study of the big picture. Instead of analyzing one consumer, we analyze everyone. Instead
More informationReview Questions. The Labor Market: Definitions, Facts, and Trends. Choose the letter that represents the BEST response.
Review Questions Choose the letter that represents the BEST response. The Labor Market: Definitions, Facts, and Trends 1. The labor force consists of a. all individuals aged 16 or older who are employed
More informationPart 1: Short answer, 60 points possible Part 2: Analytical problems, 40 points possible
Midterm #1 ECON 322, Prof. DeBacker September 25, 2018 INSTRUCTIONS: Please read each question below carefully and respond to the questions in the space provided (use the back of pages if necessary). You
More informationChapter 4. Determination of Income and Employment 4.1 AGGREGATE DEMAND AND ITS COMPONENTS
Determination of Income and Employment Chapter 4 We have so far talked about the national income, price level, rate of interest etc. in an ad hoc manner without investigating the forces that govern their
More informationECON 3010 Intermediate Macroeconomics Chapter 7
ECON 3010 Intermediate Macroeconomics Chapter 7 Unemployment Natural rate of unemployment Natural rate of unemployment: The average rate of unemployment around which the economy fluctuates. In a recession,
More informationINTI COLLEGE MALAYSIA UNIVERSITY FOUNDATION PROGRAMME ECO 183 : FOUNDATION ECONOMICS (MACROECONOMICS) RESIT EXAMINATION : AUGUST 2002 SESSION
ECO 183 (R) / Page 1 of 9 INTI COLLEGE MALAYSIA UNIVERSITY FOUNDATION PROGRAMME ECO 183 : FOUNDATION ECONOMICS (MACROECONOMICS) RESIT EXAMINATION : AUGUST 2002 SESSION Section A : Answer ALL questions.
More informationChapter 11 Aggregate Demand I: Building the IS -LM Model
Chapter 11 Aggregate Demand I: Building the IS -LM Model Modified by Yun Wang Eco 3203 Intermediate Macroeconomics Florida International University Summer 2017 2016 Worth Publishers, all rights reserved
More informationUnemployment. Sherif Khalifa. Sherif Khalifa () Unemployment 1 / 29
Sherif Khalifa Sherif Khalifa () Unemployment 1 / 29 Unemployment is the macroeconomic problem that affects people most. People rely on their labor earnings to enjoy their living standards. People get
More informationPart III. Cycles and Growth:
Part III. Cycles and Growth: UMSL Max Gillman Max Gillman () AS-AD 1 / 56 AS-AD, Relative Prices & Business Cycles Facts: Nominal Prices are Not Real Prices Price of goods in nominal terms: eg. Consumer
More information3. Suppose the following data represent the market demand for college education: a. If tuition is set at $5,000, how many students will enroll?
PS 4: 38 points Government Intervention: Chapter 9 problems 3. Suppose the following data represent the market demand for college education: a. If tuition is set at $5,000, how many students will enroll?
More informationCome and join us at WebLyceum
Come and join us at WebLyceum For Past Papers, Quiz, Assignments, GDBs, Video Lectures etc Go to http://www.weblyceum.com and click Register In Case of any Problem Contact Administrators Rana Muhammad
More informationLong Run vs. Short Run
Long Run vs. Short Run Long Run: A period long enough for nominal wages and other input prices to change in response to a change in the nation s price level. The Basic Model of Economic Fluctuations Two
More informationMacroeconomics I International Group Course
Learning objectives Macroeconomics I International Group Course 2004-2005 Topic 4: INTRODUCTION TO MACROECONOMIC FLUCTUATIONS We have already studied how the economy adjusts in the long run: prices are
More informationObjectives for Chapter 24: Monetarism (Continued) Chapter 24: The Basic Theory of Monetarism (Continued) (latest revision October 2004)
1 Objectives for Chapter 24: Monetarism (Continued) At the end of Chapter 24, you will be able to answer the following: 1. What is the short-run? 2. Use the theory of job searching in a period of unanticipated
More informationCHAPTER 6: MONITORING CYCLES, JOBS, AND THE PRICE LEVEL
Principles of Macroeconomics CHAPTER 6: MONITORING CYCLES, JOBS, AND THE PRICE LEVEL Learning Goals: A. A recession started in March 2001 and ended in November 2001. What defines a recession, who makes
More informationReview. Question 1. Answer 1. Question 2. Answer 2. Question 3. Exam Review (Questions Beyond Test 1) True or False? True or False?
Question 1 Review Exam Review (Questions Beyond Test 1) An increase in income causes the IS curve to shift to the right. Answer 1 When income changes we move along the IS curve. Income itself is not an
More informationUnemployment. Sherif Khalifa. Sherif Khalifa () Unemployment 1 / 24
Sherif Khalifa Sherif Khalifa () Unemployment 1 / 24 "It is a recession when your neighbor loses his job; it s a depression when you lose yours." Harry Truman. Sherif Khalifa () Unemployment 2 / 24 People
More informationEcon 302 Fall Don t forget to download a copy of the Homework Cover Sheet. Mark the location where you handed in your work.
Econ 302 Fall 2005 Don t forget to download a copy of the Homework Cover Sheet. Mark the location where you handed in your work. Homework #1; Chapter 1. This homework has three parts (A, B, C). Each part
More informationArchimedean Upper Conservatory Economics, October 2016
Multiple Choice Identify the choice that best completes the statement or answers the question. 1. The marginal propensity to consume is equal to: A. the proportion of consumer spending as a function of
More informationEconomics 102 Summer 2014 Answers to Homework #5 Due June 21, 2017
Economics 102 Summer 2014 Answers to Homework #5 Due June 21, 2017 Directions: The homework will be collected in a box before the lecture. Please place your name, TA name and section number on top of the
More informationBUSI 101 Capital Markets and Real Estate
BUSI 101 Capital Markets and Real Estate PURPOSE AND SCOPE The Capital Markets and Real Estate course (BUSI 101) is intended to acquaint the student with the basic principles of macroeconomics and to give
More informationChapter 4. Why Do Interest Rates Change? Chapter Preview
Chapter 4 Why Do Interest Rates Change? Chapter Preview In the early 1950s, short-term Treasury bills were yielding about 1%. By 1981, the yields rose to 15% and higher. But then dropped back to 1% by
More informationD. Institutions place constraints on the behavior of economic agents
Midterm 1 Name: Answer Key Part I. Multiple Choice (20 points) 1. Choose the correct statement: A. Real GDP excludes the quantity effect from the data series B. To compare economic growth between countries,
More informationModule 19 Equilibrium in the Aggregate Demand Aggregate Supply Model
What you will learn in this Module: The difference between short-run and long-run macroeconomic equilibrium The causes and effects of demand shocks and supply shocks How to determine if an economy is experiencing
More informationEMPLOYMENT, UNEMPLOYMENT, AND WAGES Macroeconomics in Context (Goodwin et al.), 3 rd edition
Chapter 8 EMPLOYMENT, UNEMPLOYMENT, AND WAGES Macroeconomics in Context (Goodwin et al.), 3 rd edition Chapter Overview This chapter introduces you to standard macro labor topics such the definition of
More informationFinal Term Papers. Fall 2009 ECO401. (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service
Fall 2009 ECO401 (Group is not responsible for any solved content) Subscribe to VU SMS Alert Service To Join Simply send following detail to bilal.zaheem@gmail.com Full Name Master Program (MBA, MIT or
More informationMidterm Examination Number 1 February 19, 1996
Economics 200 Macroeconomic Theory Midterm Examination Number 1 February 19, 1996 You have 1 hour to complete this exam. Answer any four questions you wish. 1. Suppose that an increase in consumer confidence
More information1) GDP is an accurate measure of the social well being of a country.
Macro Problem Set 2 WCC Fall 2017 Directions: The True/False and Multiple Choice questions do not have to be turned in for credit. It would be foolish, however, not to spend a great deal of time working
More informationPatterns of Unemployment
Patterns of Unemployment By: OpenStaxCollege Let s look at how unemployment rates have changed over time and how various groups of people are affected by unemployment differently. The Historical U.S. Unemployment
More informationDokuz Eylül University Faculty of Business Department of Economics
Dokuz Eylül University Faculty of Business Department of Economics ECN 1002 PROBLEM SET III Q1) A link between the money market and the goods and services market exists through the impact of A) tax revenue
More information