Unemployment is closely linked to rises and falls

Unemployment is closely linked to rises and falls in the GNP. If the GNP declines, this indicates falling output. Falling output affects standards of living, incomes and employment opportunities(就业机会). Unfortunately, it is not always possible to prevent fluctuations in aggregate production. Some years the GNP may peak raising inflation concers. In other years the GNP may decline into a trough(经济的低谷). This continual change from peaks to troughs is called the business cycle(商业周期，经济周期). Cyclical Unemployment(周期性失 业) occurs in years when there is an economic trough(recession).

K Real GDP B A H F 2000 G I Business Cycle Equilibrium D C 2003 2006 2009 A and B represent peaks C and D represent trough F and G represent recession H and I represent recoveries 2012 Year

The influence of the level of unemployment : The impact: the worker , the factory, the machinery and equipment. If the unemployment is high , it not only means that the employed workers are fewer , but also the factories may be closing down or machinery and equipment not being fully used. The calculation of the percentage unemployment: percentage Unemployed = the number of unemployed / the total labor force eg : a labor force of 100 million has 2 million unemployed. Percentage Unemployed = 2000000/10000 * 100% =2% er Employment.

Types of Unemployment: Frictional unemployment ：changes in jods ; few days/weeks. Structural unemployment : change in demand ; new technology. Cyclical : due to recession ; change in aggregate demand. Hard Core : physical disability ; over the age of 50; criminal. Seasonal : No work at certain times of the year. Hidden : women at home ; small villages. Under Emplyment : part-time

1. Frictional Unemployment • 摩擦性失业：指劳动者想要 作与得到 作之间的时间 消耗而造成的失业。 • It is caused by temporary employment transitions.

Breaking Down 'Frictional Unemployment' • A construction worker in a city, having completed his work on a building site, may take a few days or weeks to find a new job. A first-time job seeker may not start work for a few days or weeks. • Solutions: • information on available jobs and workers • combating prejudice(不屈服于成见） • incentives and regulations

2. Structural Unemployment Changes in consumers tastes, the increasing number of available products→changes in demand→the demand curve will create structural unemployment(some industries)

• The introduction of new technology may mean that some workers do not have the necessary skills and qualifications needed for the new job

For example: The introduction of computers and containers has led to a dramatically decline of the number of wharf( �� )laborers who previously loaded cargoes by hand

How to solve the problem? • Introducing retraining courses • moving workers to others areas Thinking: does this reallocation of human labor really effective? That can cause difficult family problems

3. Cyclical Unemployment周期性失业 Definition: Cyclical unemployment is when workers lose their jods during downturns in the business cycle.

3. Cyclical Unemployment • Cause: large drop-off of demand personal consumption个人消费 • Temporary: typical time frame of a recession(18 months) • Example: 2008 financial crisis • Different: can be avoided long time to recovery

l effects of unemployment Aggregate demand And unemployment rates People tend to save money Investment opportunities 1. economic businesses are unwilling to borrow money to buy new equipment Government revenue productivity Spending on public service

2. social: for the person who loses her/his job The person who loses job loses status and may feel inferior to friends，neighbors. The longer the person is unemployed the more difficult it is to get work.

2. social: the effects for the family As the family struggles to make ends meet, family quarrels may make the situations even worse.

3. general 1. Consumers have lover levels of demend. 2. Producers have little incentive to raise productivity.

�� 措施： 1. through a government budget deficit 2. through bank interest rates 3. by encouraging exports 4. increase in government spending

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