Economic Indicators

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Economic indicators

Table of Contents

Cyclical Unemployment3


Foreign Workers, Wages and GDP5

Profit, Employment and Production6

Economic Indicators

Unemployment means the inability to find work due to the different lengths of idle periods produce three types of unemployment. It includes frictional unemployment, structural unemployment and cyclical unemployment. In a market economy operates trend to economic instability, which is expressed in its cyclical development, unemployment, inflation price increases. Therefore, the unemployment that can affect General Motors is discussed below;

Cyclical Unemployment

General Motors can be affected by the cyclical unemployment, as the labors may get affected due to unemployment. Cyclical unemployment refers to the fluctuation in unemployment caused by economic cycles. When the rate of growth of aggregate demand is higher than normal, the demand for labor exceeds the ordinary and unemployment falls, but the reverse is true in the business cycle downturns, in which demand is reduced and then unemployment increases.

The economic policy to deal with cyclical unemployment can be considered economic recovery programs, based on circumstantial or stabilization policies within this policy are the main monetary and fiscal policies. This unemployment caused by the cyclical contraction of production; the difference between the actual value and the value of the unemployment rate natural rate of unemployment is called cyclic.

For General Motors, development of the cyclic form of unemployment to exceed its actual level of the natural; the economic cost of this excess expressed by a lag in the actual level of GDP from its potential value. Its size calculated on the basis of the law Okun. Since the employed participate in the production of goods and the unemployed - no, it can be assumed that the increase in unemployment should be accompanied by a decline in real GNP (Taylor and Weerapana, 2007). This negative relationship between unemployment and GNP called Okun law, as economist Arthur Ouken first ...
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