how to print barcode in crystal report using vb.net 3: Unemployment, In ation, and Income in Java

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CHAPTER 3: Unemployment, In ation, and Income
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the equilibrium point changes from point E1 to E3. Equilibrium output increases from y1 to y2 and the price level falls from p1 to p0. There are two approaches to measuring aggregate output: an expenditure approach, which measures the value of nal sales, and a cost approach, which measures the value added in producing nal output. The expenditure or nal sales approach consists of summing the consumption spending of individuals (C), investment spending by businesses (I), government expenditures (G), and net exports (Xn). [GDP = C + I + G + Xn]. The cost approach consists of summing the value added to nal output at each stage of production. Gross domestic product consists of all output produced within the country s boundaries.
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Business Cycles
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A business cycle is a cumulative uctuation in aggregate output that lasts for some time. Although recurrent, the duration and intensity of each uctuation varies. Points at which aggregate output changes direction are marked by peaks and troughs. A peak is a point which marks the end of economic expansion (rising aggregate output) and the beginning of a recession (decline in economic activity). A trough marks the end of a re-
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30 PRINCIPLES OF ECONOMICS
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cession and the beginning of economic recovery. The time span between troughs and peaks is classi ed as an expansionary period (trough to peak) or a contractionary period (peak to trough). There are a number of explanations for the cyclical behavior of aggregate output. The central focus of many of these theories is investment spending and consumer purchases of durable goods. These expenditures consist of large-ticketed items whose purchase, in most cases, can be postponed. For example, an individual can repair an existing car rather than purchase a new one. Thus, purchases of such items occur when credit (borrowing) is more readily available or less costly, individuals are more optimistic about the future, and/or cash ows are more certain. However no one theory is able to explain why some business cycles are more severe than others. This suggests that there are numerous causes and that the importance of each cause varies.
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Unemployment and the Labor Force
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The U.S. labor force does not include the entire population but only those who are at least 16 years old, employed, or unemployed and looking for work. A working-age person who is not looking for work is considered voluntarily unemployed and is not included in the labor force. Thus, the size of the labor force and the number of people unemployed can be understated when a signi cant number of workers, after some searching, become discouraged and stop looking for work. The unemployment rate is the percent of the total labor force that is unemployed. Unemployment arises for frictional, structural, and cyclical reasons. Frictional unemployment is temporary and occurs when a person (1) quits a current job before securing a new one, (2) is not immediately hired when entering the labor force, or (3) is let go by a dissatis ed employer. Workers who lose their jobs due to a change in the demand for a particular commodity or because of technological advance are structurally unemployed; their unemployment normally lasts for a longer period since they usually possess specialized skills which are not demanded by other employers. Cyclical unemployment is the result of insuf cient aggregate demand. Workers have the necessary skills and are available to work, but there are insuf cient jobs because of inadequate aggregate spending. Cyclical unemployment occurs when real GDP falls below potential GDP.
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CHAPTER 3: Unemployment, In ation, and Income
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In the economist s de nition of unemployment, not everyone that is without a job is unemployed.
Full employment exists when there is no cyclical unemployment but normal amounts of frictional and structural unemployment; thus, full employment exists at an unemployment rate greater than zero. This is referred to as the natural rate of unemployment. It may change when there is a change in the normal amount of frictional and structural unemployment. The cyclical unemployment rate can be negative when real GDP exceeds potential GDP and the economy is producing beyond its normal full-employment level. This negative cyclical unemployment rate indicates that the normal job search period for the frictionally and structurally unemployed is shortened because of an abnormally large number of job openings. Cyclical unemployment imposes costs upon both society and the person unemployed. Society s opportunity cost is the amount of output which is not produced and therefore is lost forever. The personal costs that occur during an economic downturn are unevenly distributed between different types of workers. Example 3.2 Table 3.1 presents the unemployment rate by sex, age, and race in 1992, when U.S. real GDP was considerably below potential output, and in 1987, when U.S. real GDP equaled potential GDP. Note that the unemployment rate is always higher for teenagers than for those older, and higher for blacks and others than for whites. This difference worsens when the economy is below its potential GDP.
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