For Use with ThomsonNOW
Chapter 16: Business Cycles and Unemployment
LEARNING OBJECTIVES
#1 - Describe the four phases of the business cycle, business cycle indicators, and interpret economic growth using the change in real GDP.
Step 1 Read the sections in your textbook titled “The Business-Cycle Roller Coaster” and “Total Spending and the Business Cycle.”
Step 2 Listen to the “Ask the Instructor Video Clip” titled “Is A Recession Inevitable After A War?” You will learn the history of war and recessions in the United States in terms of total spending.
Step 3 Watch the CNN Video Clip titled “Food for Forecasters” and analyze the factors that result in declines in real GDP.
Step 4 Watch the CNN Video Clip titled “Consumer Tales” and analyze why changes in consumer confidence concern economists.
The Result Following these steps, you have learned that there are four phases to the business cycle (peak, recession, trough, and recovery), and there are three business-cycle indicators (leading, coincident, and lagging). You also learned that the long-term annual growth rate of real GDP in the United States since 1929 is about 3 percent.
#2 - Compute the unemployment rate and discuss the difference between frictional, structural, and cyclical types of unemployment.
Step 1 Read the section in your textbook titled “Unemployment,” “Types of Unemployment,” “The Goal of Full Employment,” and “The GDP Gap.”
Step 2 Listen to the “Ask the Instructor Video Clip” titled “What Are the Four Types of Unemployment?” You will learn definitions of the types of unemployment.
Step 3 Watch the CNN Video Clip titled “Hires and Fires” and analyze how monthly employment data indicates economic performance.
Step 4 Read the EconNews article titled “Matching Jobs and Workers.” This article describes discouraged workers.
Step 5 Read the EconNews article titled “The ABC’s of Counting.” This article describes the meaning of “seasonably adjusted” data.
Step 6 Read the EconNews article titled “Why Should the Government Help?” This article describes the Employment Act of 1946 and its importance.
Step 7 Read the EconNews article titled “The Long Run Effect of Offshoring Jobs in Technology.” This article describes the effect of technology on unemployment in the United States.
Step 8 Read the EconDebate article titled “Is a Jobless Recovery a Necessary Part of the New Economy?” This article describes the issue of the impact of the business cycle and technological change on the unemployment rate.
Step 9 Read the EconDebate article titled “Do Technological Advances Result in Higher Unemployment?” This article describes the debate concerning the impact of technology on unemployment.
The Result Following these steps, you have learned that the unemployment rate is the percentage of the civilian labor force that is unemployed. You have also learned that frictional unemployment is short term while workers seek available jobs. Structural unemployment is longer than requiring training for available jobs. Cyclical unemployment is caused by jobs lost during a recession. Also, full employment is achieved when there is only frictional and structural unemployment and no cyclical unemployment exists.
Ch16-1