Full Employment (FE)
- natural rate of unemployment (NRU)
- it is equal to structural and frictional unemployment
- full employment does not mean zero unemployment
Okun's Law
- describes how unemployment relates to a nations GDP
- states that for ever 1% unemployment above the NRU, a negative GDP gap of 2% will occur
Unequal Burdens of Unemployment
- Rates are lower for white collar workers
- Teenagers have the highest rates
- Blacks have higher rates than whites
- Rates for males and females are comparable
