By Brad Cartwright on youtube.com
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In this step, you'll learn about the labor market diagram, which is a critical diagram to understand the concept of unemployment. The diagram shows the relationship between the aggregate demand for labor from firms and the aggregate supply of labor from people looking for jobs. It also includes a labor force curve, which is the total number of people in the workforce. The gap between the aggregate demand and supply of labor is representative of the natural rate of unemployment in most industrialized countries, which is around 5%. Understanding this diagram is helpful in understanding the impact of aggregate demand on the labor market, as well as the different types of unemployment."