Chapter 8 - Unemployment & Employment

Question 1

Unemployed

Answer 1

An individual who does not have a job and is looking for work.

Question 2

Labor force

Answer 2

All those 16 years of age and older who are either employed or unemployed.

Question 3

Working-age population

Answer 3

Persons over 16 years of age who are not in an institution, such as a jail or a hospital.

Question 4

Discouraged workers

Answer 4

workers who have left the labor force after not being able to find a job are called

Question 5

Unemployment rate

Answer 5

the percentage of the labor force that is unemployed.

Unemployed / Labor force = Unemployment Rate

Question 6

Participation rate

Answer 6

the ratio of people in the labor force to the working-age population
Labor force / Working age population = Participation Rate

Question 7

Aggregate hours

Answer 7

The total number of hours worked by all workers in the economy in a given period of time.

Question 8

Natural unemployment rate

Answer 8

The unemployment rate that exists when the economy is not in a recession or a boom and real GDP is equal to potential GDP.

Question 9

Frictional unemployment

Answer 9

Unemployment arising from normal turnover in the labor market, such as when people change occupations or locations, or are new entrants.

Question 10

Structural unemployment

Answer 10

Unemployment resulting from structural problems, such as poor skills, long-term changes in demand, or insufficient work incentives.