Unemployment: Unemployment is the state of an individual looking for a paying job

but not having one. Unemployment does not include full-time students, the retired, children, or those not actively looking for a paying job.

Types of Unemployment: Frictional unemployment: Frictional unemployment is unemployment that comes

from people moving between jobs, careers, and locations.

Cyclical unemployment: Cyclical unemployment occurs when the unemployment

rate moves in the opposite direction as the GDP growth rate. So when GDP growth is small (or negative) unemployment is high.

Structural unemployment: Structural unemployment is an unemployment that

comes from there being an absence of demand for the workers that are available.

Inflation: Inflation is an increase in the price of a basket of goods and services that is
representative of the economy as a whole.

Gross Domestic Product: GDP is Gross domestic product. For a region, the GDP is
"the market value of all the goods and services produced by labor and property located in" the region, usually a country. It equals GNP minus the net inflow of labor and property incomes from abroad.

GDP gap: The GDP gap or the output gap is the difference between actual GDP and
potential GDP or potential output. The calculation for the output gap is Y-Y* where Y is actual output and Y* is potential output or the natural level of output. If this calculation yields a positive number it is called an expansionary gap and indicates an economy in expansion; if the calculation yields a negative number it is called a recessionary gap and indicates an economy in recession. Okun's law: Okuns low is one of the most enduring stylistic facts in macroeconomics. It is one of the basic rules of thumb of macroeconomics. As originally formulated for US by Arthur Okun in 1962, it states in post-war period, on the average, each extra

percentage point in the unemployment rate above four percent has been associated with about a three percent decrement in real GDP. In economics, Okun's law is an empirically observed relationship relating unemployment to losses in a country's production. The "gap version" states that for every 1% increase in the unemployment rate, a country's GDP will be an additional roughly 2% lower than its potential GDP. The "difference version" describes the relationship between quarterly changes in unemployment and quarterly changes in real GDP. The accuracy of the law has been disputed.

UNEMPLOYEMENT RATE

OF
INDONESHIA YEAR 2004 2005 2006 2007 2008 GDP 257 million 285.9 million 364 million 432.1 million 511.8 million UNEMPLOYEMENT RATE 9.2% 11.8% 12.5% 9.1% 8.4%

1. In the year 2004 the actual GDP was 257 and unemployment rate is 9.20% So, If the actual GDP is 81.6 then potential GDP is 100 If If 1 257 = = 100 81.6

100 257 81.6 = 314.95

million 2. In the year 2005 the actual GDP was 285.9 and unemployment rate is 11.80% = 374.22 million 3. In the year 2006 the actual GDP was 364 and unemployment rate is 12.50% = 485.33 million 4. In the year the 2007 the actual GDP was 432.1 and unemployment rate is 9.10% = 528.24 million 5. In the year the 2008 the actual GDP was 511.8 and unemployment rate is 8.40% = 615.14 million REFERANCE: Source:

1. http://www.immigration usa.com/wfb2004/rankings/economy/unemployment_rate_2004_0.html 2. http://www.nationmaster.com/graph/lab_une_rat-labor-unemployment-rate&date=2005 3. http://www.photius.com/rankings/economy/unemployment_rate_2005_0.html 4. http://www.photius.com/rankings/economy/unemployment_rate_2006_0.html 5. http://www.photius.com/rankings/economy/unemployment_rate_2007_1.html 6. http://www.indexmundi.com/indonesia/unemployment_rate.html. 7. http://www.indexmundi.com/bangladesh/unemployment_rate.html