Chp 28

Chapter 28 begins the study of unemployment . The problem of unemployment is divided into two categories: the long run problem and the short run problem. The economy's natural rate of unemployment refers to the amount of unemployment that the economy normally experiences. Cyclical unemployment refers to year-to-year fluctuations around its natural rate and is closely associated with economic activity.  The data the BLS uses comes from a regular survey of about 60,000 households called the Current Population Survey. Based on the answers the BLS places each adult in one of three categories. Employed includes those who are paid employees, work in their own business, or work as unpaid workers in a family business. Both full-time and part-time workers are included. Unemployed refers to those who are not employed but are available for work and are trying to find employment. It also includes those waiting to be recalled for a job from which they had been laid-off. Not in the labor force is the category for those who don't fit in the previous two categories such as a home-maker or full-time student. The BLS defines the labor force as the sum of the employed and the unemployed. The unemployment rate is defined as the percentage of the labor force that is unemployed and is calculated by taking the number of unemployed over the labor force and multiplying that by 100.