Macroeconomics and Rate of Unemployment

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Macroeconomics and Rate of Unemployment
Oria Cummings
Embry-Riddle Aeronautical University

Macroeconomics and Rate of Unemployment
In essence, macroeconomics is the study of economy as a whole. Unlike microeconomics, which relates to the study of a single decision and ways it affects other economic variables, macroeconomics strives to understand aggregate economy and ways it is affected by changes in employment, local production, and inflation. Further, the government through the central bank and other bodies uses analytical models to understand changes in aggregate economic determinants such as economic growth or rate of employment thereby formulating policies that strive to accelerate economic growth. Understandably, one of the economic variables that help establish aggregate changes in the economy is changes in rate of unemployment. Unemployment refers to a number of persons ready and willing to work in particular type of a job at current market for pay but cannot secure one. In essence, unemployment as an economic indicator measures the health of the economy (Mercatus.org, 2016). For instance, high rates of unemployment indicate poor performing economy, while a decline in the rate of unemployment indicates a healthy economy or economic growth. Therefore, a measure of the rate of unemployment is an aggregate used to determine economic performance and changes that affect the overall performance of the economy. Therefore, this essay strives to elucidate aggregate economy and factors affecting it, for instance, ways changes in aggregate rate of unemployment affect the overall economic performance.
Rate of Unemployment
Rate of unemployment refers to the ratio of the number of unemployed persons in an economy versus the number of employed ones. Despite the differences that exist in the explanation of the term, unemployment rate reflects on a ratio of economic…...

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