...little@gmail.com Why is frictional unemployment important? To discuss why frictional unemployment is important to the economy, one must understand what the terms mean. Frictional unemployment is when people are unemployed because they are seeking better positions. These individuals could be recent college graduates or people who are between jobs/waiting to start a new position (voluntary or involuntary). Stay at home parents returning to work. Friction unemployment should be viewed as a short unemployed term because those people are actively seeking new employment. The reason why frictional unemployment is important is because it allows the economy to be flexible, mobile and the choices of jobs are readily available for people to seek and choose from (Nayab. 2010). When there are options for individuals to seek better employment opportunities, it benefits companies as well. It encourages the individuals to find work that is going to be suited to their needs and skills (Carter, June 2011). That is a great benefit as people begin to hold out for the position they seek and not settling for a job just to have one. If the frictional unemployed start to take a position just for the sake of having a job, they will continue to seek other jobs of their choice and when one is found they would vacate their current position. The companies are able to seek, recruit, hire and retain a more skilled labor force. This truly benefits the companies because they will always have a constant...
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...Will It Get Any Better Soon? : Unemployment Rates Ariel Cooper Business Economics GM545 Summer 2011 alcoop86@gmail.com Chapter 16, Question 5 In the US economy there is always some level of unemployment present. There are people losing jobs, leaving jobs, taking temporary hiatus from employment, on a daily basis. For the purpose of this exercise will be taking an in depth look at what a specific type of unemployment entails. This unemployment type is called Frictional unemployment. Let’s begin by defining what frictional unemployment is; frictional unemployment refers to the “natural” unemployment of our economy. This is described as the transitional period in which people move from one employment position to another, sometimes experiencing up to a few weeks in between positions. (Stone, Core Economics, p. 443) During this period of time these people are frictionally unemployed, they may already have a new position waiting on them to start, or they may be holding out in search of a better employment opportunity. Frictional unemployment can also refer to when a business decides to promote a hiring freeze and does not bring in new talent due to the assumption that there are not enough qualified candidates, when in fact there are. We will now discuss why frictional unemployment is important to have in any economy. Frictional unemployment is important to have in the economy because there is a constant reallocation of resources from one productivity level to another...
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...successful. Free trade has made its mark on Americans for wealth and prestige. Free trade has brought Americans accustomed to a way of living and that is why there is free between states. There are other factors as to why free trade is free between states and why free trade is not necessarily free for countries. The following will explain. Free trade has given Americans a benefit in the United States. The NAFTA (North American Free Trade Agreement) has given Americans the ability to trade freely with Canada and Mexico. It is only beneficial that there be free trade between the United States, Canada, and Mexico. All three feed off of each other and will only benefit from each other’s resources and abilities. For example, USDA.gov explains, “In 2007, Canada and Mexico were, respectively, the first and second largest export markets for U.S. agricultural products” (usda.gov). Exports to the two markets combined were greater than exports to the next six largest markets combined. This only allows for trade to increase between the two countries. Canada is benefitting the same exact way. With trading with the United State, Canada is benefitting from the agriculture that they are lacking in the North. With the three countries so closely tied together, this is how and why free trade is evident in the States. There is a reason why it is not like that with other countries. Canada, United States, and Mexico are separated in different regions which allow each country to be beneficial...
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...econs Question 1: HCI Prelim 2007 The unemployment rate in Singapore increased from 2.7% in 2001 to 4.2% in 2005. | (a) | Explain the main causes of unemployment in Singapore in recent years. | [10] | Introduction Define unemployment. State that there are mainly 3 causes of unemployment in Singapore. Cyclical unemployment in Singapore State Cyclical unemployment is related to the business cycle. Elaborate During an economic downswing (recession or depression), aggregate demand decreases and firms find they cannot sell all their current output, and stocks pile up. Firms will then adjust to the deficiency of demand by cutting back on production and reduce workers, leading to an increase in cyclical unemployment. Exemplify Over the last 2 decades, recessions or economic slowdown have been largely triggered by external shocks to our economy such as the Asian Financial Crisis in 1997/98; global dotcom crisis in 2000/01; September 11 terrorist attacks in 2001; the SARS epidemic in 2003 and most recently the Global Financial Crisis (US sub-prime mortgage crisis) in 2008/09. The economy went into sharp contractions as a result of these external shocks. These shocks badly affected our export trade with the rest of the world, tourism and international banking as well as financial services sectors. In short, it hit our export revenue (X) and investment (I) components of AD causing domestic output to fall. And since exports from Singapore are dominated...
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...limitations of the national income accounts in how they represent our standard of living? NIPA has some shortcomings. For instance, the national accounts ignore most nonmarket transactions: If a maid cleans your condo, GDP rises, but if you do the same job yourself, GDP is unaffected. And NIPA fails to account for the environmental impact of economic activity. Chapter 16 Question 5 5. Why is frictional unemployment important to have in any economy? Unemployment is split into three types. When people are temporarily unemployed because they are switching jobs, they are said to be frictionally unemployed. Frictional unemployment is short term, and it exists because there are always some workers who are voluntarily or involuntarily changing jobs. The natural rate of unemployment, or full employment, is that rate of unemployment where price and wage changes are consistent, and thus the inflation rate is equal to people’s inflationary expectations. It is also where unemployment is only frictional and structural; cyclical unemployment is zero. Economists often refer to the natural rate of unemployment as the nonaccelerating...
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...Ahmed Shaqo Business Economics GM545 Spring session A 2012 Adam.gmail.com Chapter-25 question 14 Why might protections trade barriers not save American jobs or benefit the economic? First of all I would like to defined what protection trade barriers means, it’s a measure that government or public authorities introduce to make imported goods or service less competitive than locally produce goods or service. The government has much way to apply trade barriers such as Tariffs, quotas, embargoes, license required, and regulations establishing health and safety. Protection trade barriers does not save American jobs or benefit the economic for a several reasons: 1- It would cause a limited choice of product and would therefore force customer to pay higher prices and accept inferior quality, for example Tariffs are taxes will increase the imported products’ price which has the same quality as goods produce by local suppliers that will cause the customer to pay more for product he could have it for cheap price. 2- Quotas is a legal limit on amount that can be imported, which may cause raise price on the foreign product, , for example if we import ten million technology product from china every year that mean we need this amount because is cheaper and has good quality’s. Government put a limitation for import technology product from china to five a million part a year, that will make this particular product cost more money, because the foreign country knows that...
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...Ahmed Shaqo Business Economics GM545 Spring session A 2012 Adam.gmail.com Chapter-25 question 14 Why might protections trade barriers not save American jobs or benefit the economic? First of all I would like to defined what protection trade barriers means, it’s a measure that government or public authorities introduce to make imported goods or service less competitive than locally produce goods or service. The government has much way to apply trade barriers such as Tariffs, quotas, embargoes, license required, and regulations establishing health and safety. Protection trade barriers does not save American jobs or benefit the economic for a several reasons: 1- It would cause a limited choice of product and would therefore force customer to pay higher prices and accept inferior quality, for example Tariffs are taxes will increase the imported products’ price which has the same quality as goods produce by local suppliers that will cause the customer to pay more for product he could have it for cheap price. 2- Quotas is a legal limit on amount that can be imported, which may cause raise price on the foreign product, , for example if we import ten million technology product from china every year that mean we need this amount because is cheaper and has good quality’s. Government put a limitation for import technology product from china to five a million part a year, that will make this particular product cost more money, because the foreign country knows that...
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...Exercise 1: Chapter 15 Question 14 The national income can be defined as the sum of all the output of the economy nationwide, where the gross national product (GDP) measures the value of that economy. Though not all economy inputs are considered in the GDP measurement, and then arises the question of the uncertainty or shortcomings of the national income account. I remember when I first came in the United States my householder does not have laundry machines; the household wash their clothes themselves so I do, we cannot afford a Laundromat for every dirty cloth. I understand now such input does not affect the GDP, our action is simply ignores by the nation because there is no payment burden by the state tax. Still our household complained about the water bill in the house, consequently we pay tax anyway. Similarly some activities such as drug trade and babysitting are not considered in calculating the national income. Recalling the household above, the householder’s wife babysits children that their parents bring into the house and pay her directly. I heard that the lady was trying to get a babysitting license, which means she was operating and the nation does not know. Other non-marketed activities such as services from person to person and prostitution do not include in the GDP. I think some activities out of our standard of living that the nation does not rely on, their use might encounter some inaccuracies and defect the national income account. We will not accurately measure...
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...“Course Project- Part 2” Business Economics GM 545 Dunya Alaasemi Dalaasemi@yahoo.com Chapter 15, Question 14 According to Ott (2008), “National income is the total market value of production in a country’s economy during a year. It can be measured alternatively and equivalently in three ways: The value of expenditures, the value of inputs used in production and the sum of value added at each level of production” It is a system employed to account for and document economic changes. A national income account system is employed to account for and record economic changes. Investopedia (2012) stated that it provides economists and statisticians with detailed information that can be used to track the health of an economy and to forecast future growth and development. Although national income accounting is not an exact science, it provides useful insight into how well an economy is functioning, and where monies are being generated and spent. The following are some of the metrics calculated by using national income accounting include gross domestic product (GDP), gross national product (GNP) and gross national income (GNI). Ott (2008) found that using these “Statistics as an indicator of standard of living can be erroneous as the result of multiple inaccuracies or conclusions drawing from the data”. Therefore, as indicated in Econport (2006) handbook the following are the limitations of the national income accounts: * Errors in Measurement: Black Market and underground...
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...There are a different types of unemployment in the economy, each characterising how and why different workers cannot find jobs. Please discuss the following: 1. Define unemployment in your own words and provide your thoughts if you feel the unemployment number is an accurate level of true unemployment. Give reasons why or why not. Unemployment are persons who are of the age of 15 years or over who currently do not have a job in the labour force but are actively looking. I do not feel the unemployment number is an accurate level of true unemployment. One reason I feel this way is the way our government counts those who are unemployed, and those who are not. For example, in regards to the overall numbers of unemployment, discouraged workers are not counted within this number. I believe discouraged workers are very important to the unemployment rate, because they are able to work, albeit discouraged by certain circumstances. 2. Describe some of the actions (or policy decisions) that governments can do to reduce the level of unemployment? When looking at the level of employment, we first can look at it from every level: frictional, structural and cyclical. Frictional would be the toughest to combat against as it can deal with many complex issues, such as the individual choosing to quit and look for better work. Let us jump into structural unemployment, over time new jobs open up that require new skills, and old jobs that require different skills disappear. With...
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...Economics “Unemployment & Our Economy” Zarina Gilchrist Professor Denalane, Economics 100 November 20, 2015 Upon doing my research, I viewed several different articles about our economy and the effects in the United States. The articles I read in USA Today & Buzzle, discusses several different areas of our economy and lack of growth such as our Fiscal Crisis, Unemployment, Outsourcing, Reduction In the Output, Reduction in Tax Revenue, Rise in Government Expenditure, and Iraq and Afghanistan Wars. In my paper, I will discuss unemployment. I will elaborate on its types, the causes and effects on our economy and the consumer. According to the definition of unemployment according to Investopedia states, unemployment occurs when a person who is actively searching for employment is unable to find work. It also states, unemployment is often used as a measure of health in the economy. The most frequently cited measure of unemployment is the unemployment rate. This is the number of unemployed persons divided by the number of people in the labor force. The U.S. economy has slowed significantly in the recent years. According to an article from USA Today, the unemployment rate dipped to 5.1%, the lowest since April 2008, when the jobless rate was 5%, according to data from the U.S. Bureau of Labor Statistics. The economy created 173,000 new jobs last month. Many would tend to believe that the uncertainty of the future economy has been an important factor for...
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...companies. Likewise, unemployed workers represent wasted potential production within an economy. Consequently, unemployment is a significant concern within macroeconomics. The term unemployment refers to the general condition in which resources are willing and able to produce goods and services but are not engaged in any productive activities. Moreover, it arises when GNP declines over a long period of time and when businesses reduce their output. Cutbacks in production inevitably mean that industries will use less labor and materials. Consequently, some workers will lose their jobs and those seeking new jobs will have a difficulty finding employment. Increased unemployment is a major consequence of cyclical declines in real GNP during the periods of recession. Workers in industries usually are laid off especially those who are engaged in the production of producer durable and consumer goods because investment purchased by business and purchases of durable goods by consumer declines during the period of recessions. While unemployment is most commonly thought of in terms of labor, any of the other production factors such as capital, land and entrepreneurship can be unemployed. The analysis of unemployment especially labor unemployment, goes hand-in-hand with the study of macroeconomics. The most noted and widely used measure of unemployment is the unemployment rate of labor. To measure the unemployment rate, it must first determine who is eligible and available to work. The labor force...
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...Unemployment: An evil necessity? 1. Introduction By definition economics is “a social science concerned chiefly with description and analysis of the production, distribution, and consumption of goods and services.” And as with other types of sciences, economics contains many beliefs and theories that may be difficult to understand, yet are essential in the “day to day” decision making for many people. But also like other sciences, economics has evolved into what it is today. And it will continue to evolve as the practitioners of the science debate, test and discover better and more efficient way to “analyze the data.” Perhaps more than any other time in our nation’s history, people have personally seen the effects of economics. One of the most visible areas seen in the market place today is the economics of unemployment. Unemployment is currently 8.2% as measured by the United States Bureau of Statistics. I believe that most people are familiar with the term “Unemployment Rate”, but I imagine that only a handful understand the significance of what this “number” is telling us. Economics is similar to mathematics, physics and chemistry in the sense that all disciplines require thought, equations, observations and experiments to be performed in order to get an “observable” end result. And from that result we make conclusion about the very thing we are testing. So it is with unemployment; a “mathematical equation” that has the possibility of helping us understand the underlying...
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... | |Macroeconomics 1 | | | |ALLOWABLE MATERIALS AND INSTRUCTIONS TO CANDIDATES | |Write your full name and student number on each exam booklet together with the number of exam books used. | |Students must not write, mark in any way any exam materials, read any other text other than the exam paper or do any calculations during reading time. | |All mobile phones must be switched off and placed under your desk. You are in breach of exam conditions if it is on your person (ie. pocket). | |This is a CLOSED BOOK Exam. | |Non text storing...
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...market structures in an economy and compares the two extremes of perfectly competitive and monopoly markets, discusses the shutdown decision of a perfectly competitive market with illustrations and why a monopoly is important for a country. Secondly, the inflation and unemployment in Trinidad and Tobago are defined, examined and the origin of inflation and type of unemployment are decided upon. Table of Contents 1. Introduction 5 2. The perfectly competitive firm 6 2.1 Market equilibrium 6 2.2 Time periods in Economics 7 2.2.1 Short run 7 2.2.2 Long run 7 2.3 Theory of Costs 8 2.3.1 Fixed cost (FC) 8 2.3.2 Variable cost (VC) 9 2.4 Shut-down decision 9 2.4.1 Short run 9 2.4.2 Long run 10 3. Monopoly market 10 3.1 Output and price level comparison of perfectly competitive and monopoly market 11 3.2 Monopolies in the economy 11 4 Inflation 11 4.1 Calculation of inflation 11 4.2 Inflation types 12 4.2.1 Type of inflation in T&T 13 5. Unemployment 13 5.1 Types of unemployment 13 5.1.1 Cyclical Unemployment 13 5.1.2 Frictional Unemployment 13 5.1.3 Structural Unemployment 14 5.1.4 Classical Unemployment 14 6 Unemployment costs to an economy 14 6.1 Costs to the individual 14 6.2 Costs to society 14 6.3 Costs to country 15 7. Conclusion 15 References 16 Appendices 17 1. Introduction Economics exists in all aspects of society and is defined in many ways. Contemporary economics textbooks have definitions including...
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