CLEP Macroeconomics

CLEP Macroeconomics covers the principles of macroeconomic theory, including national income, inflation, and fiscal policy.

National Income and GDPUnemploymentInflation
Fiscal PolicyMonetary PolicyAggregate Demand and Supply
Understanding Economic IndicatorsApplying Macroeconomic PolicyGlobalization and Macroeconomics
Mastering Key FormulasActive Practice with Real DataUsing Process of Elimination
National Income and ...UnemploymentInflationFiscal PolicyMonetary PolicyAggregate Demand and...Understanding Econom...Applying Macroeconom...Globalization and Ma...Mastering Key Formul...Active Practice with...Using Process of Eli...
Basic Concepts

Unemployment

Understanding Unemployment

Unemployment occurs when people who are able and willing to work cannot find jobs. Economists track unemployment rates to gauge how well the economy is providing jobs for its people.

Types of Unemployment

  • Frictional Unemployment: Short-term, occurs when people are between jobs or just entering the workforce.
  • Structural Unemployment: Happens when skills don’t match available jobs, often due to technology changes.
  • Cyclical Unemployment: Rises and falls with the business cycle (booms and recessions).
  • Seasonal Unemployment: Occurs in industries with busy and slow seasons (like agriculture or tourism).

The Unemployment Rate

The unemployment rate is the percentage of the labor force that is jobless and actively seeking work.

Why Is Unemployment Important?

High unemployment means people are struggling, and the economy isn’t using all its resources. Low unemployment usually signals a healthy economy.

Examples

  • During the Great Recession of 2008-2009, the U.S. unemployment rate soared above 10%.

  • A college graduate spending a month job-hunting after graduation is frictionally unemployed.

In a Nutshell

Unemployment measures how many people who want jobs cannot find them, and it's a key sign of economic health.

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Inflation