Quiz #3 and #4 Review Flashcards
current unemployment rate
7.9% is the current unemployment rate
targeted rate of unemployment
5-6%
season unemployment
agriculture, construction, teachers
frictional unemployment
in a fluid labor market, matching workers with jobs takes time
-basically just people between jobs
structural unemployment
- mismatch between workers and skills/requirements for jobs
- as economy changes, we produce different goods and services
- industries lose jobs
cyclical unemployment
- unemployment caused by a recession
- simply a case of too few jobs around
- no demand for stuff, no demand for labor that makes that stuff
who calculates the unemployment rate?
Bureau of Labor Statistics
numbed of employed
143.3 million employed
number of people who looked in past four weeks
12.3 million who looked in past four weeks
number not in labor force
89 million not in labor force
143.3 million employed
12.3 looking in past four weeks
89 million not in labor force
calculate U3 unemployment rate
12.3/155.6 = 7.9%
marginally attached workers
- 2.4 million
- looked for work in the past year but not in the past 4 weeks
discouraged workers
- 804,000 people
- gave up work because they believe there are no jobs
working part time for economic reasons
you want a full-time, but all you can get is part-time
-8 million people
how do you calculate U6 unemployment rate?
unemployed + marginally attached + part time for economic reasons DIVIDED BY labor force + marginally attached
labor force participation rate
of the people who could be in labor force, how many are in the labor force?
what is our labor force participation rate?
63.6% labor force participation rate
what two kinds of people arent included in the labor force participation rate?
people under 16 and people in the hospital or prison
-military
how do you find the Labor Force Participation Rate?
Labor Force / who could be in labor force
two ways to measure inflation
- GDP Deflator
2. Consumer Price Index
Consumer Price Index
- released every month
- calculated by bureau of labor statistics
how does the BLS collection information for CPI?
CPI measures the prices of a set of things that ordinary households purchase on a regular basis…
What is the Market Basket? what are the percentages of housing, transportation, food and beverage
- the set of goods and services that the CPI examines the price of
- Housing (42%), Transportation (17%), Food and Beverage (15%)
How is the CPI calculated?
- to calculate, you shop in January and add up all the values
- you then shop in February, add up all the values and put it on the top of the base month
- In march, we add up the value of all goods and put it over top of base month
- PRICES INCREASE FROM BASE MONTH
can you compare GDP deflator and CPI?
YES
what is not in the CPI?
-online goods
What is the Billion Prices Project?
a project created by MIT economist Dr. Alberto Cavallo to track online prices
-tracks 5 million prices DAILY
