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Unemployment and Business Decisions

Introduction and Alignment
Economists, policy makers, and managers are concerned about the levels of employment and unemployment in an economy. The Bureau of Labor Statistics (BLS) has developed a specific set of statistics for categorizing the employment status of the population. This particular exercise will examine the various components of unemployment and how it is affected by various macroeconomic events.

Upon completion of this assignment, you should be able to:

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Evaluate the effects of changes in unemployment statistics on business decisions.
Resources
Text: Economics for Managers
Media: Chapter 15
File: Chapter 15 Animation Transcripts
Websites:
Overview of BLS Statistics on Unemployment: http://www.bls.gov/bls/unemployment.htm
Unemployment, total (% of total labor force): http://data.worldbank.org/indicator/SL.UEM.TOTL.ZS
Khan Academy: http://www.khanacademy.org
Background Information
Causes of unemployment are classified as being frictional, structural, or cyclical. This exercise will incorporate an analysis of each attribute and determine how the Bureau of Labor Statistics determines the unemployment rate. The unemployment rate can provide positive or negative indications for firms looking at future operations and whether or not they should conduct restricted or expanded planning scenarios over a given time frame.

Instructions
Review Chapter 11 of Economics for Managers..
Watch the following animations. To move through the animation sequence, click Nextuntil you reach the end of that animation sequence. These animations will prepare you for the discussions and other assignments in this and upcoming workshops.
Animation 15.1
Animation 15.2
Animation 15.3
Animation 15.4
Animation 15.5
Animation 15.6
Review the information available on the following websites. You will use this information to answer the questions below:
Overview of BLS Statistics on Unemployment: http://www.bls.gov/bls/unemployment.htm
Unemployment, total (% of total labor force): http://data.worldbank.org/indicator/SL.UEM.TOTL.ZS
Read the following scenario, then navigate to the threaded discussion and respond to the questions:
Michigan Unemployment Tops 15%
The U.S. Department of Labor reported that Michigan’s unemployment rate in 2009 rose to 15.2%, becoming the first state in 25 years to suffer an unemployment rate exceeding 15%. Michigan has been battered by the collapse of the auto and housing industries, and has had one of the highest unemployment rates in the country over past several years.

Why is the reality of the unemployment problem in Michigan actually worse than the statistic of 15.2%?
Is the increased unemployment frictional, structural, or cyclical? Please explain your answer.
Your initial post is due by the end of the fourth day of the workshop.
Read and respond to at least two of your classmates’ postings, as well as all follow-up instructor questions directed to you, by the end of the workshop.
Your postings should also:
Be well developed by providing clear answers with evidence of critical thinking.
Add greater depth to the discussion by introducing new ideas.
Provide clarification to classmates’ questions and provide insight into the discussion.

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