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Macro 10
- 2. Lecture 10 Macroeconomics Chapter 10-11
- 3. Quiz 1.You have two offers: A. $100 in 5 years B. $200 in 10 years Your opportunity rate is 10%. What is your choice and Why? 2. Unemployment is 7.5% and there are 600 people in the labor force. How many are employed?
- 4. Labor Force Adults 16+ who have jobs or are looking for jobs. Employed + Unemployed
- 5. Labor Force Participation Rate The percent of the Adult Population that is in the Labor Force
- 7. 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Year 0N 1945 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Year 0 20 40 60 Shareofthecivilianlaborforce(%) Men Women
- 8. Employed paid employees work in own business unpaid workers in family business full-time and part-time jobs but temporary absence
- 9. Unemployed not employed available tried to find a job in the last four weeks waiting to be recalled from layoff
- 11. 16+ 79% Under 16 21% U.S Population millions % Under 16 66 21% 16+ 254 79% Total 320 100%
- 12. Unemployed 7.7 million 3% Employed 152.3 million 60% Not in Labor Force 94 million 37% Adult Population
- 13. Unemployed 7.7 million 5% Employed 152.3 million 95% Labor Force
- 14. millions % Population % Adults % Labor Force Population 320 100% Age under 16 66 20% Age 16+ 254 80% 100% Not in Labor Force 94 30% 37% In Labor Force 160 50% 63% 100% Employed 152.3 47.6% 60% 95.2% Unemployed 7.7 2.4% 3% 4.8%
- 15. Problems Overstate - Above actual Cash workers Understate - Below actual Discouraged workers
- 16. Natural Rate of Unemployment The normal rate of unemployment around which the unemployment rate fluctuates
- 17. Cyclical Unemployment The deviation of unemployment from its natural rate
- 19. Frictional Unemployment Time to find a new job
- 21. Structural Unemployment Too many workers Change in Demand
- 24. What kind of unemployment is caused by smartphones?
- 26. Unemployment Insurance Government program to provide income when workers become unemployed
- 27. Unemployment Insurance Unintended Consequence Moral Hazard May prolong unemployment
- 28. Minimum Wage Laws Government sets a minimum wage that can legally be paid Price Floor
- 29. $0 $5 $10 $15 $20 0 10 20 30 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
- 30. Labor Union Worker association that negotiates with employers over wages, benefits, and conditions
- 31. Labor Union One contract Strike Conflict between workers
- 32. Efficiency Wages Higher wages make more productive employees
- 33. Efficiency Wages Employee Wage Pizzas Productivity Wage per Pizza Bob $10 5 $2.00 Bill $20 12 $1.67
- 34. Efficiency Wages More Healthy Lower Turnover Higher Quality More Effort