l>Lecture 13 note

Lecture 13: Unemployment and also Inflation

business cyclesmeasuring unemploymentinflation

Business Cycles

The American economy experienced boosting material wealth and productivity end the century.

You are watching: A consumer price index attempts to measure changes in:


*

However, the growth of output has actually not to be smooth: periods of increasing output are followed by durations of falling output. This fluctuations in economic activity are called business cycles.


*

A recession is a decrease in full output, income, employment, and trade generally lasting 6 month to a year, and significant by widespread contractions in plenty of sectors of the economy.

Measuring Unemployment

The job force is composed of those civilization with jobs and also those human being looking for work. The labor force participation rate steps the fraction of the civilian, noninstitutionalized populace of those 16 year of period or larger who are in the job force.
*
A human is unemployed if castle are in search of a job yet unable to uncover one. The unemployment price is calculate by separating the number of unemployed world by the size of the job force.
*

The official unemployment rate might overstate or understate the true quantity of unemployment:overstateno inspect on those who say they space unemployedunderstatepart-time workers that cannot discover a full-time job are, nonetheless, counted as totally employeddiscouraged workers who have provided up searching for a task are not counted together unemployed

Inflation

The consumer price index (CPI) tracks alters in the prices payment by consumers for a representative or industry basket the goods and services. The CPI attempts to measure the "cost the living". The price of the industry basket of goods and also services is set equal come 100 in the base year. The CPI for any kind of year is same to 100 +/- the percent adjust in the expense of the sector basket since the base year. If the CPI amounts to 150, the price of living has actually risen 50 percent since the basic year; the price of living has risen 80 percent because the basic year if the consumer price index equals 180. The office of labor Statistics has a web page of frequently asked questions about the CPI.

See more: What Is The Typical Subject Matter Of Realistic Opera? Music Multiple Choice

*
The inflation price is the percentage change in the consumer price index.
*