ch 6-8

Question 1

labor force

Answer 1

number of employed workers plus number of unemployed workers

Question 2

unemployed worker

Answer 2

worker who is

1. currently not employed
2. actively seeking employment at the prevailing wage rate

Question 3

unemployment rate

Answer 3

number of people unemployed / number of people in the labor force

Question 4

GDP gap

Answer 4

Yp-Y

potential gdp - real gdp

Question 5

discouraged worker

Answer 5

an unemployed person who sought employment unsuccessfully, and being discouraged, stopped seeking employment

Question 6

underemployment

Answer 6

an employment situation where

1. part time workers want to work full time
2. a worker accepting the only job available even though he is over qualified for that job

Question 7

labor force participation rate

Answer 7

labor force / working age population

Question 8

three types of unemployment

Answer 8

1. frictional
2. cyclical
3. structural

Question 9

frictional unemployment

Answer 9

unemployment due to the normal turnover in the labor market

Question 10

cyclical unemployment

Answer 10

unemployment changes with short run changes in production levels

Question 11

structural unemployment

Answer 11

long term unemployment

Question 12

production function

Answer 12

amount of inputs used in the production process to the amount of output that is actually produced

Question 13

marginal product of labor

Answer 13

change in output / change in labor input

^Y/ ^L

Question 14

real wage

Answer 14

amount of goods you can buy per one working hour