Alright. Now I want to introduce 2 more key concepts for this course that are interrelated, unemployment and inflation. So we're going to talk about them on a high level here. We're just introducing them, but we're going to go into a lot more detail on both of these topics in later videos. Okay? But here, we're just going to go over the definitions and some key trends related to these two topics. So let's start here with unemployment. What is unemployment? Well, obviously, it's when people don't have a job, right? But what is our specific definition? It's when a person is willing to work, actively searching for a job, but cannot find a job, right? So they're willing and actively searching for a job. That's different than someone who's like, oh yeah, I'd get a job but I, you know, I'm just going to watch some soap operas instead, you know. Yeah. Yeah. Yeah. I'll get a job. Mom, don't worry. I'm going to get a job. Mom, I'm going to get a job. Don't worry. Alright? So unemployment, we're actively searching for a work but cannot find a job. So let's look at this trend in our graph here when we talk about the unemployment rate over time. So what we have here, what we've shaded in purple, these purple sections, these are recessions in the economy. Okay? And generally, when you get shown a graph like this in a macroeconomics class, generally, they're going to show you the recessions. They'll do something like this where they'll highlight in a different color where the recessions are happening. And what do you see happening as a trend throughout all of these recessions? Look what we have. As these recessions are happening, what's happening to the unemployment rate? The amount of the percentage of people that are unemployed, Right? So notice throughout all of these recessions, what is happening to unemployment? It is increasing. Right? So the unemployment rate tends to increase during recessions. And that should sort of make logical sense, right, when we talk about, oh, no, the economy is going through a recession. You know, bad things are happening in the economy. Well, guess what? People can't find jobs. That's exactly, a main definition and a key flag to finding that we're in a recession is that these unemployment rates are increasing. Cool? But notice that even when the recession ended, we still had some changes in unemployment that were still kinda going up, but we have certain rules that mark what a recession is and when it starts and ends. And we see that it does start to recover and the unemployment does generally decrease outside of the recession. Right? Cool. So, obviously, when we talk about unemployment, it sounds like a bad thing. But why is it a bad thing? Well, it's undesirable because when people are unemployed, a nation is not using its most important resource and that is the skills of the citizens. The actual work power of the citizens. If they can't find jobs, well, they're not going to be able to produce anything and it's bad for the nation's economy. Right? So the most important resource there is the skill of the citizens putting the citizens to work. And when they can't find jobs, obviously, that's not good for the economy. Cool? So let's pause real quick and then we'll discuss a related topic of inflation. Let's check it out.
10. Introducing Economic Concepts
Introducing Concepts - Unemployment and Inflation