No single economic statistic attracts more notice or implies more about the well being of the social system than does the unemployment rate. The moral and economic waste brought on by recurring waves of unemployment has always been one of the principal reproaches directed at the system by its critics. Previously, to be without work was to be involuntarily idle, and unemployment tended to be seen as an individual matter rather than a social concern beyond the will of the persons involved. To be without work was more of leisure than what we would call unemployment today. Mass unemployment gradually came largely due to the pursuit of economic self-interest and an extensive division of labor. Apart from unemployment that is the result of an inadequate level of aggregate demand, important categories are frictional, structural, and seasonal unemployment.

Structural unemployment is another cause that creates unemployment. As time goes on, consumer’s demand changes, which cause a growth in one industry, a de

An alternative explanation is based on job insecurity. Unreliable evidence about layoffs and corporate downsizing suggests that US workers are more uncertain about job prospects than in the past. This uncertainty could explain low inflation in the face of a tight job market: workers might be reluctant to ask for wage increases.

Seasonal unemployment mostly depends on the climate and therefore varies in the regions of Canada. In the wintertime industries like fishing, construction, and tourism struggle in certain regions. However, demand in some industries like snow cleaning will increase. The other examples where people could be seasonally unemployed are farming, lumbering and etc. People who work in those industries are usually employed for six month and unemployed for the other six when there industry is off-season.

I can see the Federal Reserves reasoning behind raising interest rates to slow down the economy and lower inflation, but they need to realize that the rate of inflation is not completely dependant upon the rise and fall of the economies well being. The past has proven to us numerous times that the economy is quite capable of being stable and prosperous without affecting the inflation rate in a negative way. That’s why I feel that it would be in the nations best interest to continue letting the economy expand into bigger and better things without raising interest rates to unneeded proportions.

There are two types of demand deficient unemployment. The first is cyclical unemployment and the second is chronic unemployment. Cyclical unemployment results from a general lack of demand for labor. When the business cycle turns downward, demand for services and goods drop. Consequently, workers begin to be laid off. Chronic unemployment is caused by factors beyond the control of the individual workers. If it is long lasting, the rise of unemployment will not have an even occurrence on the entire labor force. As the workers are laid off, the fall in consumption will have its most severe impact on the purchases of cars, appliances, etc. Workers in those industries will bare the brunt of unemployment. The remedy for demand deficient unemployment is government intervention through macro-economic monetary and fiscal policies.

Finally, actual inflation can be influenced by expected inflation through the wage- setting process. For example, workers may respond to higher expected inflation by demanding higher wages, and firms ma

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