BUSAD 120 Chapter Notes - Chapter 1: Labour Force Survey, Aggregate Demand, Underemployment
Document Summary
Both high unemployment and high inflation indicate poor performance by the macroeconomy and generate large costs for households, firms, governments and society. Unemployed resources mean inefficiencies in production (idle labour, idle equipment, lower. Gdp), lower incomes, greater inequalities, and significant psychological, health, social and political problems. High rates of inflation create uncertainty about the future, interfere with planning and decision-making by households, firms and governments, increase inequality by privileging debtors over creditors, and create social and political problems. The best macroeconomic position is full employment with low and stable inflation. Economic definition: unemployment refers to persons who (a) want to work, (b) are able to work, but (c) are without work. Not having a job is insufficient; you must also want, and be able, to work. The definition thus excludes people without jobs who do not want to work (such as retirees) or are incapable of working (such as the seriously handicapped).
