Page 55 - FINAL CFA I SLIDES JUNE 2019 DAY 5
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Session Unit 4:
17. Understanding Business Cycles, p. 1
LOS 17.d: Describe types of unemployment and compare measures of unemployment. p.88
Frictional unemployment : happens during time transition from one job to another!
Structural unemployment : long-run changes in the economy that eliminate some jobs while
generating others for which unemployed workers are not qualified.
Cyclical unemployment is caused by changes in the general level of economic activity.
• + when the economy is operating at less than full capacity
• - when an expansion leads to employment temporarily over the full employment level.
Other concepts:
• Unemployed
• Unemployment rate
• Underemployed (part time versus full time or doing over qualified-for jobs)
• (Labour Force) Participation (Activity) ratio (% actually employed or looking)
• Discouraged workers (can work but no longer looking)
