1. CH. 13: ECONOMIC CHALLENGES
UNEMPLOYMENT
INFLATION
POVERTY

3. FOUR TYPES OF UNEMPLOYMENT
FRICTIONAL:
“In between jobs”
Example:
recent college
graduate
unhappy worker

4. FOUR TYPES OF UNEMPLOYMENT
SEASONAL:
Employment is based
on the time of year
Example:
Teachers
Athletes
Agricultural workers

5. FOUR TYPES OF UNEMPLOYMENT
STRUCTURAL:
Skills do not match the
jobs anymore
Example:
Milk man
Bank tellers (maybe)
Factory workers (maybe)

6. FOUR TYPES OF UNEMPLOYMENT
CYCLICAL:
Directly connected to
the “downs” of the
business cycle
Example:
Unemployment increased
during the Great Depression,
The ’80s and NOW!

7. HOW IS UNEMPLOYMENT MEASURED?
NUMBER OF UNEMPLOYED PEOPLE
NUMBER OF PEOPLE IN THE LABOR FORCE =
UNEMPLOYMENT RATE

8. OTHER EMPLOYMENT PHENOMENA:
DISCOURAGED WORKERS
GIVE UP LOOKING
THE UNDEREMPLOYED
TAKE JOBS THAT ARE
“BENEATH” THEM

9. WHAT IS “FULL EMPLOYMENT?
SOMEWHERE BETWEEN
4-6% UNEMPLOYMENT
THERE IS NO CYCLICAL
UNEMPLOYMENT

10. INFLATION: an increase in prices
CAUSES
EFFECTS
TOO MUCH MONEY IN CIRCULATION
TOO MUCH DEMAND FOR “STUFF”
PRICE OF RAW MATERIALS OR LABOR INCREASES
YOUR MONEY CANNOT BUY AS MUCH
IF BANKS DO NOT INCREASE YOUR SAVINGS ACCOUNT INTEREST RATES BASED ON INFLATION, THEN YOUR SAVINGS IS NOT “SAVINGS”

11. HOW IS INFLATION MEASURED?
THE MARKET BASKET:
Basic goods and services
consumed by most
Americans
Inflation is calculated by
comparing the price of those
goods over time.
(CPI: tells if its up or down)

12. What’s in the Market Basket?

13. What is “Poverty?” Living below the “poverty threshold”
Based on the size of a family

14. Why is there poverty? Uneven distribution of resources
Unequal access to equal education
Blatant discrimination
The income gap
UNEQUAL EDUCATIONAL OPPORTUNITIES”

15. POOR AND LAZY ARE TWO DIFFERENT GROUPS OF PEOPLE!
10% of all American children are born into poverty
10% of all American senior citizens live in poverty
70% of all single mothers with children live in poverty
25% of African Americans live in poverty
25% of Latin Americans live in poverty