7 Flashcards
the total number of adults (aged 16
years or older) willing and able to work and who are
actively looking for work but have not found a job.
unemploymemt
the individuals aged 16 years or
older who either have jobs or who are looking and
available for jobs; the number of employed plus the
number of unemployed.
labor force
24.7% highest US unemployment rate
great depression
current unemployment
3.9%
Individuals who have stopped looking for a job because
they are convinced they will not find a suitable one
discouraged workers
formula for calculating unemployment rate
unemployment/labor force x 100
4 categories of unemployment
– Job loser
– Reentrant
– Job leaver
– New entrant
biggest category of unemployment
individual involuntary terminated or who was laid off:
40 to 60 percent of the unemployed
job loser
An individual who has worked a full-time job before but left the labor force and has now reentered it looking for a job:
- 20 to 30 percent of the unemployed
17 weeks
Reentrant
– An individual who voluntarily quits:
-10 to 15 percent of the unemployed
Job leaver
– An individual who has never worked a full-time job for two weeks or longer:
-10 to 15 percent of the unemployed
New entrant
Major types of unemployment:
- Frictional
– Structural
– Cyclical
– Frictional unemployment results from the fact that
workers must search for appropriate job offers.
– This takes time, so they remain temporarily
unemployed.
Frictional unemployment
– This type of unemployment over lengthy intervals results from skill mismatches with position requirements of employers and from fewer jobs being offered by employers constrained by governmental business regulations and labor market policies.
– Considerable evidence shows that government labor market policies influence how many jobs businesses wish to create, thereby affecting structural unemployment.
Structural unemployment
– This type of unemployment results from business
recessions that occur when aggregate (total) demand
is insufficient to create full employment.
cyclical unemployment
A sustained increase in the average of all prices of goods and services in an economy
target 2%
Inflation
A sustained decrease in the average of all prices of goods and services in an economy
Deflation
price index formula
cost market today/cost market baseyear x 100
Real-world price indexes:
-Consumer Price Index (CPI)
– Producer Price Index (PPI)
– GDP deflator
– Personal Consumption Expenditure (PCE) Index
Clauses in contracts that allow for increases in specified
nominal values to account for changes in the cost of living
COLA
Inflation at a rate that comes as a surprise
- Creditors lose.
– Debtors gain.
unanticipated inflation
The ups and downs in business activity throughout the economy
Business fluctuations
