Description
our phases of the business cycle consist of:
- A depression phase
- A recessionary phase
- Recovery phase
- An expansionary phase
During a recessionary phase of the business cycle would be the mostdesirable time to purchase large ticket items due to lower levels ofinflation and interest rates.
During an expansionary phase of the business cycle would be the leastdesirable time to purchase large ticket items due to higher levels ofinflation and interest rates.
Our labor force is consisted of both employed and unemployed workers.
Labor Force Participation Rate (LFPR) = 
The term full employment implies that all willing and able peoplewho can work are actively engaged in the labor force. Full employmentsuggests that our countrys unemployment rate is between 3-6%. Ourcountry will never achieve zero-percent unemployment since our economywill always experience a natural rate of unemployment.
Natural Rate of Unemployment = Frictional unemployment + Structural unemployment
Frictional unemployment are workers who are unemployed, but they have transferable job skills and they are in-between jobs.
Structural unemployment are workers who have mismatched job skills.
Discouraged workers are workers who have been out of work for four ormore weeks. These individuals are not applying for open positions, arenot registered at their local job service, and are not going on anyinterviews. They have become very discouraged and have left the laborforce.
Unemployed workers are applying for open positions, are going oninterviews, and are registered at their local job service. They areactively seeking employment.
Employed workers can range from workers who work from 1-hour to 40-hours plus per week.
Four causes of unemployment include:
- Job losers
- Job leavers
- Re-entrants
- New entrants
Four types of unemployment:
- Seasonal unemployment
- Frictional unemployment
- Structural unemployment
- Cyclical unemployment
Inflation is defined as an increase in overall prices across the board.
