12.5 Students analyze the economic behavior of the U.S. economy

1) Distinguish between nominal and real data.

2) Define, calculate, and explain the significance of an unemployment rate, the number of new jobs created monthly, an inflation or deflation rate, and rate of economic growth.

3) Distinguish between short-term and long-term interest rates and explain their relative significance.

 

.nemployment:

Unemployment is not just a personal issue. It is an issue for the National Economy as well. Economists can measure how healthy the conomy is at any given time by counting the number of peoplewho are unemployed. Congress, the President, and other policy makers pay close attention to these statistics so they can take the necessare action to get people back to work.

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Unemployment always exists, even in a booming economy.Frictional unemployment occurs when people take time to find a job. For example, people might change jobs, be laid off from their current jobs, need some time to find the right job after they finish their schooing, or take time off from working for a varitety of other reasons. Unemployment insurance, which provides an income to laid-off workers seeking jobs, may contribute slightly to frictional unemployment. A worker receiving unemployment insurance faces less financial pressure to find a new job immediately.

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The amount of unemployment in the nation is an important clue to the health of the economy. For this reason, the government keeps careful track of how many people are unemployed, and why. The United States Bureau of the Census (USBC) conducts monthly census relating to the size and other characteristics of the population.

Side note: A census is an official count of the population.

Each month, the Bureau of Labor Statistics (BLS), a branch of the U.S. Department of labor, polls a sample of the population. This sample Consisting of about 50,000 families, is designed to represent the entire population survey, the BLS identifies how many people are employed and how many are unemployed. Using these numbers, the BLS conputes the unemployment rate, or the percentage of the nations labor force that is unemployed.

Do you think it is possible for the economy

to reach an unemployment goal of 0?

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Zero unemployment is not an achievable goal in a market economy, even under the best of circumstances. Economists generally agree that in an economy that is working properly, an unemployment rate of around 4 to 6 percent is still normal. Such and economy would still experience frictional unemployment. In other words, full employment is the level of employment reached when no cyclical unemployment exists.