Fthis123321 Posted June 5, 2020 Report Share Posted June 5, 2020 Hi the title says it all I’m not sure what type of diagrams I should use to describe unemployment and explain an increase of unemployment and show its impact on the GDP. Thank your for the help! Reply Link to post Share on other sites More sharing options...
VB1 Posted August 19, 2020 Report Share Posted August 19, 2020 (edited) Hi there! Based on what you've said, I assume you need to show demand-deficient recession representing cyclical unemployment. It is always suggested to use the AD/AS model wherever possible. For the purpose of understanding, I have listed down below the main types of unemployment and possible graphs you could draw: - Cyclical Unemployment: Caused by either Demand-Deficient Recession (where the AD curve shifts below full employment levels on AD/AS classical model) or Negative Supply Shock (Stagflation) (where SRAS curve shifts to the left; a decrease in output as well as an increase in price) - Structural Unemployment: Caused by tech changes or foreign countries producing goods more cheaply; no diagram for this - Frictional, Seasonal Unemployment: No diagram again - Natural Rate of Unemployment/Full Employment: Diagram showing AD, LRAS and SRAS curve intersecting at full employment level of output. Let me know if you need me to clarify more and hope this helps! Edited August 19, 2020 by VB1 Reply Link to post Share on other sites More sharing options...
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