Inflation and Unemployment
Why would an unemployed person work a job for no pay?
What is a product or service everyone uses?
Warm-up
Today I will be able to analyze inflation and unemployment in the United States by constructing a short response.
Content Objective
Measures changes in prices over timeConsumer Price Index
364 goods and services- The BasketWhat’s a good product or service for the
CPI?Base years- 1982-1984
Price Index
* FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
Price Index
* FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)* HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
Price Index
* FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)* HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)* APPAREL (men's shirts and sweaters, women's dresses, jewelry)
Price Index
* FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)* HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)* APPAREL (men's shirts and sweaters, women's dresses, jewelry)* TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
Price Index
* FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)* HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)* APPAREL (men's shirts and sweaters, women's dresses, jewelry)* TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)* MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)*
Price Index
* FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)* HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)* APPAREL (men's shirts and sweaters, women's dresses, jewelry)* TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)* MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)* RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);*
Price Index
* FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)* HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)* APPAREL (men's shirts and sweaters, women's dresses, jewelry)* TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)* MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)* RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);* EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
Price Index
* FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)* HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)* APPAREL (men's shirts and sweaters, women's dresses, jewelry)* TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)* MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)* RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);* EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);* OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).
Price Index
CPI= Market basket/by base year average
Inflation= change in CPI from previous year
Price Index and Inflation
Inflation- 1951
In times of prolonged inflation, who suffers more? Creditors or debtors? Why?
High-level Thinking Question
Labor force- all persons 16 and older who are either employed or actively seeking employment. 154,000,000.Excludes military and incarcerated
Unemployed- all persons seeking work. worked <1hr., family business <15
hrs
Unemployment
Unemployed / labor forceUnemployment Rate
Frictional- workers between jobs
Sources of Unemployment
Frictional- workers between jobsStructural- fundamental change in tastes or how business is done.Outsourcing
Sources of Unemployment
Frictional- workers between jobsStructural- fundamental change in tastes or how business is done.Outsourcing
Technological- machines replace workers
Sources of Unemployment
Frictional- workers between jobsStructural- fundamental change in tastes or how business is done.Outsourcing
Technological- machines replace workers
Cyclical- swings in the business cycle
Sources of Unemployment
Frictional- workers between jobsStructural- fundamental change in tastes or how business is done.Outsourcing
Technological- machines replace workers
Cyclical- swings in the business cycle
Seasonal- centers around weather
Sources of Unemployment
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Exit Ticket