Chapter 6 Flashcards
(25 cards)
What two groups is the population separated into?
participants and nonparticipants
all persons age 16 and over who are either working for pay or actively seeking paid employment
labor force
the percentage of the working age population working or seeking employment
Labor Force Participation Rate
the alternative combination of final goods and services that could be produced in a given time period with all available resources
Production possibilities
the inability of labor force participants to find jobs
Unemployment
1 percent more unemployment results in 2 percent less output
Okun’s Law
How is the unemployment rate calculated?
Unemployment rate= Number of unemployed people/Labor Force
an individual who isn’t actively seeking employment but would look for or accept a job if one were available
Discouraged Worker
people seeking full time paid employment who work only part time or are employed at jobs below their capability
Underemployment
What are the costs of unemployment?
- Lost Income
- Lost Confidence
- Social Stress
- Lost Lives
unemployment due to seasonal changes in employment or labor supply
Seasonal Unemployment
brief periods of unemployment experienced by people moving between jobs or into the labor market
Frictional Unemployment
What are the three factors that distinguish frictional unemployment
- Enough jobs exist for those who are frictionally unemployed- adequate demand for labor
- They have the skills required for available jobs
- The period of job search should be relatively short
What percent of the unemployment rate is frictional unemployment responsible for?
2-3%
unemployment caused by a mismatch between the skills or location of job seekers and the requirements or location of available jobs
Structural Unemployment
unemployment attributed to a lack of job vacancies, to an inadequate level of aggregate demand
Cyclical Unemployment
committed the federal government to pursue a goal of maximum employment
Employment Act of 1946
the rate of output at which inflationary pressures intensify; the point on the supply curve where the slope increases sharply
Inflationary flashpoint
the lowest rate of unemployment compatible with price stability, variously estimated between 4% and 6% unemployment
Full employment
the long term rate of unemployment determined by structural forces in labor and product markets
Natural Rate of Unemployment
set the goal as a 4% unemployment rate
Full Employment and Balanced Growth Act
the relocation of production to foreign countries
Outsourcing
Percentage of the population that are unemployed
unemployment rate
what is the approximate unemployment rate currently
3.2%
