ECO

• unemployment: people who are willing and able to work but cant find a job
• economically inactive: not part of the labour force and not willing to work
• economically active: part of the labout force
• labour force: total number of people who are available for work
• factors affecting labour force: retirement age, school leaving age, women working and people who choose 3 education
• unemployment rate: n of people unemployed/ n of labour force x100
• claimant count measure: those who register as unemployed to claim unemployment benefits (limited amount of time or until you find a job)

  problemas: some may not be looking for jobs and some may be working illegal and still claiming this benefit
• labour force survey: a suvey that counts as unemployed the peopple that say so in a survey

  more accurate than cc

  problems: costly, people may lie, takes time, not easy

  sampling: they grab a portion of the population to represent the whole population/ problems: may not be representative

  unemployed people for the ilo: people of working age

  are without work in an specific period of time

  are available to work in the next two weeks

  are seeking for paid employment
• frictional unemployment: workers between jobs
• voluntary unemployment: worker who quit their jobs and are looking for a better one (wages,conditions etc)
• serach unemployment: worker that dont acept the jobs offered and spend time looking for a better.
• differences between voulntary and search: voluntary are not actively searching for jobs whereas search is actively seeking jobs
• casual unemployment: workers out of work between time/seasons --> ski instructors --> specific and seasonal jobs
• seasonal unemployment: demand for worker fluctuates between times of the year
• cyclical unemployment: lack of aggregate demand --> firms produce less --> fewer jobs needed
• structural unmploymenr: due to changes in the structure of the economy --> changes in D and S patterns
• regional unemployment: declining insdutries may be concentrated in some particual areas
• technological: the introduction of tecnology may replace workers and contribute to unemployment
• international: workers lose their jobs as demand switches from domestic industries to foreign competition, ej soja
• consequences of unemployment: decrease in income, decrease in living standars and opportunity cost of people who could be working (resoruces wasted)
• inflation: increase in the prices in average
• deflation: a sustained fall in the price level
• desinflation: inflation rate falls but it is still positive
• Purchasing power: quantity of goods and services you are able to buy with one unit of income/money
• CPI: index that measures the price level and inflation
• cpi steps

  1. Select a base year
  2. Research on peoples spening patterns
  3. Attach weights to different categories
  4. find out price changes
  5. multiply weights and price changes
• 1. select a base year: select economical normal and stable year
• 2) Research of spending patterns: Survey that asked people ehat they earn, buy ect and find out peoples spendings patterns in different categories like health,education etc
• 3) Attach weights and percentages to different categories: give % to different categories, % of ones salary spent in each category, 30% health,40% services
• Find out price changes: compare spending patterns and how much they changed from base year
• diffculties measuirng cpi:

  1. Base year
  2. Survey
  3. Basket of goods and services
• Difficulties in selecting a base year: you may realize that the base year you chose was high or low in inflation
• Difficulties in survey: people may lie, may not be representative, spending patterns may change
• the basket of goods and services: may be out of date and changed, spending patterns may change, crisis may not be taken into account
• differences between real data and nominal values:

  real data: real data that has been adjusted for inflation

  nomial values: prices that are opperating while we do the analysis
• cost-push inflation: prices increase because cost of production increases, gdp decreases, shift to the left AS
• wage-price spiral: cost increases --> price increases --> workers will demand more wages --> cycle continues
• demand-pull inflation: an increase in AD pulls the prices up, shift to the right. happnes when: an increase in AD is not matched by an increase in as
• Demand pull monetarists: they believe that an increase in AD is caused by an increase in money supply

  more money supplu --> increase ad --> inflation
• Demand pull Keynesians: they belive that an increase in ad caused more money supply

  increase ad --> firms will need to borrow more money to produce --> money supply increase --> inflation