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The unemployment rate represents the number of unemployed as a percentage of the labor force. Labor force data are restricted to people 16 years of age and older, who currently reside in 1 of the 50 states or the District of Columbia, who do not reside in institutions (e.g., penal and mental facilities, homes for the aged), and who are not on active duty in the Armed Forces. This rate is also defined as the U-3 measure of labor underutilization. The series comes from the Current Population Survey (Household Survey) The source code is: LNSource: US. Bureau of Labor Statistics Release: Employment Situation Growth Rate Calculations | US recession dates The series comes from the Current Population Survey (Household Survey)The source code is: LNSource: US. Bureau of Labor Statistics Release: Employment Situation Growth Rate Calculations | US recession dates Source: same as textbook * * * * * * * * * * * * * * * * * * * * * Long-term Real GDP Per Capita (2000 dollars) long-run upward trend… Great Depression World War II First oil price shock Second oil price shock 9/11/2001 U.S. Unemployment Rate(% of labor force) Great Depression First oil price shock Second oil price shock Financial crisis World War I Great Depression Financial crisis World War II World War I Oil price shocks U.S. Inflation Rate(% per year) Great Depression First oil price shock Second oil price shock Financial crisis World War I /news.release/cpi.nr0.htm Tools Economist Use -Economic models …are simplified versions of a more complex reality irrelevant details are stripped away …are used to show relationships between variables explain the economy’s behavior devise policies to improve economic performance Mankiw presents the supply demand for new cars as an example of a model: shows how various events affect price and quantity of cars assumes the market is competitive: each buyer and seller is too small to affect the market price Variables Qd = quantity of cars