Business Cycle & Unemployment. The economy in flux. Examining the Economy. Need to address two Time Horizons Long-Run Over the Course of Several Years, what is GDP’s Trend? Short-Run What are GDP’s month-to-month or quarter-to-quarter fluctuations?. A Closer Look at Real GDP.
The economy in flux.
Need to address two Time Horizons
Business CyclePhases of the Business Cycle
Growth Rate > 0
Growth Rate < 0
Growth Rate = 0 & moving from + to -
Growth Rate = 0 & moving from - to +
TimeEasier to look at Growth Rates
Working Age Population cycle
Anyone over 16 years old
Not in Labor Force
Civilian Labor Force
Armed forces, household workers, volunteers, students, retirees, disabled, Institutionalized workers, Discouraged Workers
Member of working age population not listed to left
No job, but looking within last 2 weeks: New entrants, re-entrants, lost or quit last job & laid-off
Paying job or self-employedPopulation Break Down
Discouraged Worker: a person who wants work, would take a job if found, but has given up looking.
=UE / (LF)
=UE / (UE + E)
Avg. UE% = 5.6%