About This Chapter
'Unemployment' is a word that looms pretty heavily these days. But what exactly is unemployment? Do you know how it's defined and measured? Do you know what causes the unemployment rate to increase and decrease? You might be surprised by what you'll find when you delve more deeply into this issue. Unemployment is more complex than it may initially seem, but this portion of our principles of macroeconomics course should help make the concept of unemployment a lot easier to understand.
When you hear a politician brag about his or her potential ability to create jobs, you might have the general feeling that what they're saying sounds pretty good, but do you really understand what they're claiming to be able to do? These lessons talk about how unemployment number can rise and fall without any job creation happening at all. Additionally, these videos talk about types of unemployment that have nothing to do with the business cycle.
The concept of unemployment will be further explored by breaking it down into three distinct types and you'll learn that all types of unemployment are not the same. These lessons also cover the ways in which our expectations can have an impact on the economy and unemployment numbers.
Understanding unemployment is an important component in understanding macroeconomics. So, check out these videos and learn more about an important topic that has had a deep impact on today's society.
1. Defining and Measuring the Unemployment Rate
You've probably heard about the unemployment rate, especially given how high it was in the 2008 recession. Find out how economists define unemployment, what the unemployment rate is, and how to calculate it in this lesson.
2. Why the Unemployment Rate Decreases and Increases
Policymakers, investors, and consumers watch the monthly unemployment rate with great interest. In this lesson, you'll learn what factors influence the unemployment rate and why the rate can change rapidly from month to month.
3. Three Types of Unemployment: Cyclical, Frictional & Structural
If you've ever lost your job after the holiday season, you've experienced at least one type of unemployment. In this lesson, explore the three types of unemployment including cyclical, frictional, and structural using real-world examples.
4. Natural Rate of Unemployment: Definition and Formula
Explore the natural level of employment through the eyes of the Classical School and Keynesian economics, including fiscal policies that may reduce it.
5. Rational Expectations in the Economy and Unemployment
This lesson provides an overview of the theory of rational expectations and then applies it to the labor market, fiscal policy and monetary policy. In the lesson, you'll learn more about expectations and outcomes in a world where people want to maximize profit.
6. Minimum Wage and its Effects on Employment
There are times when the labor market is perfectly balanced between what employers are willing to pay and what workers want in a job. In this lesson, find out what happens to the labor market when governments intervene, imposing a minimum wage.
7. Natural Rate of Unemployment: Graphs & Analysis
Many economists believe in a natural rate of unemployment. In this lesson, you'll learn about the natural rate of unemployment and how it affects business.
8. Measuring the Costs of Unemployment
Unemployment has serious effects on individuals, businesses, governments, and the economy in general. In this lesson, you'll learn how the costs of unemployment impose on each of these. We'll also take a look at Okun's law.
9. Efficiency Wage Theory & Impact on Labor Market
In this lesson, we'll discuss efficiency wage theory. We'll cover what it is, how it impacts the labor market, and why companies may turn to this type of practice.
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Other chapters within the Economics 102: Macroeconomics course
- Scarcity, Choice, and the Production Possibilities Curve
- Comparative Advantage, Specialization and Exchange
- Demand, Supply and Market Equilibrium
- Measuring the Economy
- Inflation Measurement and Adjustment
- Aggregate Demand and Supply
- Macroeconomic Equilibrium
- Inflation and Unemployment
- Economic Growth and Productivity
- Money, Banking and Financial Markets
- Central Bank and the Money Supply
- Fiscal and Monetary Policies
- Foreign Exchange and the Balance of Payments
- Inflows, Outflows, and Restrictions
- Studying for Economics 102