Measuring Economic Growth
Unemployment
(ILO)International Labor Organization defines unemployment:
-People who are out of work,have found job and are waiting to start working in the next 2 week
What is Labor Force?
-The labor force is made up of those in employment and those in unemployment
What is Economically active?
-The labor force is also known as the economically active population
What Is Economically Inactive?
-People who are have no job but doesnt meet the criteria of unemployment are called as economically inactive
Economically Inactive
-Student
-Parents who look after their child
-Those who take early retirement
-Sick people or with disability
GDP
GDP (Gross Domestic Product)
- When measuring how much a country can Produced there is a Standard from United Nations that is used by countries around the world
- This measure is called Gross Domestic Product or GDP
- GDP is the TOTAL AMOUNT of GOODS and SERVICES produced by a country in a year.
Inflation
What is Inflation?
continuing rise in prices over a period of time.
Hyperinflation = a situation where inflation level are very high or cannot be controlled.
Inflation rate = the % change in prices over a specific time period
Reflation = when there is a Rise in GDP after a Recession
Deflation = defined as a continuous decrease in prices across an economy
Stagflation = when Inflation is Rising Very High, while the economy is Stagnant (Not Growing)
Disinflation = defined as Decrease in the Rate of Inflation
Natural Unemployment Rate
4% - 6%
Impact Of Unemployment to:
-GDP
-Use Of Scares Resources
-Poverty
-Government Spending
-Government Tax Revenue
-Consumer And Business Confidence
-Society
How to Use measure Inflation
-Goverment Ussually measure and monitor the rate of Inflation monthly using the Consumer Price Index (CPI)
-Cpi Record the price of about 600 Goods and Services purchased by over 7000 Families
Types of Inflation:
-Demand pull inflation:Inflation caused by too much demand in the economy
-Cost push Inflation:
Inflation caused by rising business cost
The Impact of inflation:
-Prices
-Wages/Salary
-Exports
-Unemployment
-Menu Cost
-Shoe leather Cost
-Uncertainly
-Business and Consumer Confidence
Inflation caused Wage/Salary Spiral:
Inflation -> Wage (Rise) -> Cost Production (Rise) -> Price
GDP per capita
TOTAL AMOUNT of GOODS and SERVICES produced by a country in a year DIVIDED by the number of POPULATION.
GDP Formula:
GDP= C+I+G+NX
C= Consumption
I= Investment
G= Government Spending
*NX= Nett Export
How to Maximize The GDP in Some Country ?
Increase the productivity and the goods
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Structural Unemployment
-Sectoral Unemployment
-Technological Unemployment
-Regional Unemployment
-Voluntary Unemployment
-Frictional Unemployment
-Seasonal Unemployment
Seasonal Unemployment Some types of workers are only required for certain times of the year.
Technological unemployment is when people lose their jobs because they are being replaced by technology.
Frictional unemployment is a short-term unemployment which occurs when people move from one job to another.
(Seasonal Unemployment)
Some types of workers are only required for certain times of the year.
Sectoral Unemployment os when people lose their jobs because the industry where they work is in decline
Voluntary unemployment is when people voluntarily choose not to work