Download Unit 7 Economic Challenges: Unemployment, Inflation, and Poverty

Economic Challenges:
Unemployment,
Inflation, and Poverty
Do Now
•Describe the
impacts/consequences
of Globalization (USE
YOUR NOTES!!)
• http://www.wxyz.com/news/state/michigan-movescloser-to-drug-testing-some-welfare-recipients
• Should Unemployment benefits be
expanded or cut?
Unit 7 Part I
• Describe the unemployment rate
• Identify the four major types of unemployment
• Discuss the main economic costs of unemployment
Question…
• Why should we care about
unemployment?
• Unemployment Rate = percentage of labor force
that is unemployed
• Labor force is people above 16, below 65 and are
• 1. Looking for work actively
• 2. Have a job
• No job + looking for work +
part of labor force = counted
as unemployed
• That is it!! Who does that leave
out?!
Who does that leave out?
• 1. Discouraged Workers: people who have wanted a
job but have stopped looking
• Stiff competition for one job
• Frustration, depression
• 2. Underemployed: workers who have jobs below
their skill level or work part-time but want full time
work
4 Types of Unemployment
• 1. Frictional Unemployment: temporary job loss when
worker moves from one job to another
• Health part of the economy: finding better jobs, actor, musician
• Mr. Said Example
4 Types of Unemployment
• 2. Structural Unemployment: Changes in
technology and changes in consumer tastes can leave
people jobless
• Ex: CD players, fads that are now dead
• How can better technology hurt job growth?
4 Types of Unemployment
• 3. Seasonal Unemployment: joblessness that
happens because of changes in weather or time of
the year
• Retail stores
• Agriculture
4 Types of Unemployment
• 4. Cyclical Unemployment: joblessness due to
recessions and economic downturn. The worst kind
of the 4
What kind of unemployment?
What type of unemployment?
What type of unemployment?
What type of unemployment?
Your choice…
• 1. Complete the back of your worksheet titled
“Types of Unemployment Part II”
• Or…
• 2. Create a political cartoon using colored pencils,
markers, on separate sheet of paper that describes
one of the “4” types of unemployment
Unit 7 Part II
• Explain how economists evaluate price changes over
time
• Describe what causes inflation
• Explain how inflation affects the economy
• Is 1 million dollars worth in
2014 or in the 1960? Why?
• https://www.youtube.com/watch?v=jTmXHvGZiS
Y
• https://www.youtube.com/watch?v=cKKHSAE1gIs
What is inflation
• Inflation: an increase in the average price of all products in an
economy
• Happens when overall quantity demanded exceeds quantity
supplied for a long period of time
• People compete for scare resources (Price goes up!)
• A new home in Brooklyn, NY cost $2,500 (1853)
• A routine doctor’s visit cost $2 (Florida, 1852)
• A dozen pairs of Levi Strauss blue jeans cost $13.50
•
•
•
•
•
(1874)
One pair of shoes cost $0.98 (1875)
One suit cost $10.00 (1875)
One Oldsmobile cost $650 (1904)
Total annual cost of Cornell University, including living
expenses was $1,400 (1927)
One movie ticket cost $1 (Chicago, 1978)
Consequences of Inflation
• Consequences of Inflation: Write these down!!
•
•
•
•
Encouraged Speculation
Distorted distribution of income
Distorted spending patterns
The value of wages goes up*****
Hyperinflation: When inflation goes insanely high!
Can you imagine trying to spend millions of dollars
just trying to buy food? Welcome to Zimbabwe…
https://www.youtube.com/watch?v=mM3_z2RB3YU
Making Money in the Stock Market
What is a stock?
• Stock = % ownership in a company.
• If you buy stock, you technically own part of the company you
bought stock in
• Stocks are traded daily in the stock market (New York Stock
Exchange) (high speed trading video)
•
http://www.popmodal.com/video/1277/Trading-Places-Final-Exchange-Scene-amp-Explanation
•
https://www.youtube.com/watch?v=nppON29OZ_4
How do I make money off stocks?
• Stocks go up and down in value every day
• BUY LOW, SELL HIGH
• Sell the stock at a high price, and you make the difference in cash
• Ex: Buy stock when it’s at $50, sell it at $100, you
make $50 times the amount of shares you bought
(100, 200 shares, etc)
What causes the price changes?
• Company makes money or looks like it’s doing well = increase in
stock price
• Company loses money or looks like it’s not doing well = decrease
in stock price
• **Ex: New person takes over as CEO for company (stock
price usually increases)**
•
http://www.ibtimes.com/joe-kennedy-pandora-ceo-resigns-stock-price-soars-20-after-announcement-photo-1116622
Optional Slide (Investing Info)
• http://money.cnn.com/magazines/moneymag/mon
ey101/
• If you want to know more about money, investing,
saving, and smart ways to use your money
• Check out stock market posters in the back of the
room