• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

IB Economics IA Commentary. Title of Extract: Economys gains fail to lower jobless rate

Extracts from this document...

Introduction

International Baccalaureate Internal Assessment: Economics Commentary 1 Candidate Name: Candidate Number: Date of Commentary: January 3, 2011 Word Count: 730 Pertaining Section of IB Economics Syllabus: 3 (Macroeconomics) Title of Extract: "Economy's gains fail to lower jobless rate" Source: Internet - Associated Press in the Honolulu Star Advertiser http://www.staradvertiser.com/business/20101224_Economys_gains_fail_to_lower_jobless_rate.html# Date of Extract Publication: December 24, 2010 Economy's gains fail to lower jobless rate Unemployment filings are falling, but millions of workers remain idle after 26 weeks or more POSTED: 01:30 a.m. HST, Dec 24, 2010 WASHINGTON " Economic reports suggest employers are laying off fewer workers, businesses are ordering more computers and appliances, and consumers are spending with more confidence. Combined, the data confirm the economy is improving, and further job gains are expected in 2011. The economy's outlook is brightening even though hiring has yet to strengthen enough to reduce an unemployment rate near 10 percent. The number of people applying for unemployment benefits fell last week to a seasonally adjusted 420,000, the Labor Department said yesterday. ...read more.

Middle

Throughout the extract, focus is placed on America's lagging job market compared to recent economic improvement. Relative economic logic suggests that as an economy recovers, the unemployment rate (Unemployment Rate - "percentage of the labor force unemployed at any time.1") would consequentially improve. However, as the extract implies, this process occurs at a delayed pace due to the severity of the latest economic downturn and the resulting massive layoffs that cannot be matched with current job creation. Although the overall job market remains strained from recession, the extract notes the decline in initial claims for unemployment insurance down to 420,000 as "a significant improvement after hovering most of the year above 450,000". This, however, does not reflect openings in the work force, but rather that fewer workers are being laid off and the beginning of recovery to pre-recession jobless levels. Therefore, the prevailing problem in America's job market no longer lies with the layoff situation, but rather the reluctance of employers to rehire or create new jobs. ...read more.

Conclusion

is higher than real GDP (GDPCA)), and with low unemployment, the gap narrows or becomes negative. During the recession periods, the diagram shows the gaps positively widen and, due to the drastic climb in unemployment in the 2008-2009 Great Recession, real GDP began to fall, creating the widest gap shown. Through analysis of the extract and diagrams, one can conclude that the United States displays a modernly unprecedented positive GDP gap which represents failure of the economy to fully employ all of its given resources. Therefore, even though the economy has made gains in GDP, it is still not fully utilizing its entire labor force which causes the United States to function inside of its PPC. Since the economy is not at full productivity, greater possible gains in GDP are irreversibly forgone, leaving weary employers responsible. 1 - Defined by: Economics: Principles, Problems, and Policies, 15th edition textbook by Campbell R. McConnell and Stanley L. Brue, publisher: McGraw-Hill Irwin. 2 - Graph generated from Economic Data at Federal Reserve Bank of St. Louis, <http://research.stlouisfed.org/fred2/>. ?? ?? ?? ?? http://www.staradvertiser.com/business/20101224_Economys_gains_fail_to_lower_jobless_rate.html# ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Economics essays

  1. Unemployment IA

    Wage stickiness can be looked at from two aspects, the short and long run. In the short run only minor differences would be seen, but in the long run they might fall/grow slowly. Even though the recession caused unemployment in Spain, during December in 2010 the unemployment rate fell.

  2. Extended Essay Economics

    The fear of price controls prevents a firm operating in Venezuela from operating as a traditional oligopoly. If it is thought a firm is "price gouging," it is likely the government will intervene and introduce price controls. This means that a firm in Venezuela will likely sell their goods for slightly less than the demand curve would dictate elsewhere.

  1. IB Economics IA Commentary. Title of Extract: OPEC will pump more oil, assures Saudi ...

    must be produced to sustain the demand. In Figure 1, the original supply (S1) and demand (D1) meet equilibrium at Point A, which is established as the most efficient price. However, when the demand curve increases and shifts outwards (D2), the ideal equilibrium price rises to P2 at Point B.

  2. IB Macroeconomics Commentary

    The demand for labor will decrease from Q to Q1. The distance from point A to point B represents the quantity of cyclical unemployed people. As the economy moves towards point B in Figure 2, the peak of its business cycle, employment for these individuals will be restored.

  1. IB Economics IA - Commentary 2 (Mortgage Rates Down)

    By Lara Moscrip, CNNMoney.com contributing writer November 13, 2008: 1:05 PM ET SOURCE - CNN MONEY http://money.cnn.com/2008/11/13/real_estate/mortgage_rates/?postversion=2008111313 NEW YORK (CNNMoney.com) -- Mortgage rates fell for the second week in a row, finance firm Freddie Mac said Thursday, as the weakening economy resulted in the slowest pace of home purchase applications in nearly eight years.

  2. IB Economics IA Commentary. Title of Extract: EU imposes dumping tariffs on Chinese ...

    gains in producer surplus and tax revenues earned by the government (Producer surplus - the difference between the minimum price a producer is willing to accept for their good and the price they actually receive). Due to this tariff, the original quantity supplied domestically at Q2 has now increased to

  1. MacroEconomic IA -Japanese Unemployment

    They expect that the consumption expenditure could increase as the price of borrowing is cheaper, the households will have more available money to spend. Even Though, the expansionary monetary policies? effort will fail as the target interest rate is already close to zero for a long time and there is a deflationary spiral.

  2. Analysis of &amp;quot;The End of Work&amp;quot; by Jeremy Rifkin discusses the decline of the ...

    from 29 times the income of the average manufacturing worker, to 93 times. Rifkin says that the growing gap in wages and benefits between top management and the American workforce is creating a deeply polarized society I agree to Rifkin on this point, today, we see CEO getting paid huge

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work