Unit 2: Output, Employment, and Unemployment
Individuals must make a choice between spending their time working or pursuing other activities like raising a family, leisure, or enhancing health and wellness. When individuals offer their services for work, they receive a wage in exchange for giving up alternative choices. Commensurate with the individual's choice, firms must also demand labor for an employment market to exist. When the wage individuals demand equals the wage offered by firms, equilibrium exists.
The government is very active in most labor arrangements. Aside from regulating the work environment, government typically provides minimum guarantees of wage, unemployment insurance, and a system of income in retirement. Macroeconomists have various ways of modeling the trends, effects, and causes of unemployment. Sustained high levels of unemployment may lead to societal difficulties.
Completing this unit should take you approximately 17 hours.
2.1: Output and Employment
2.2: Business Cycles and Policies
Unit 2 Assessment