Ch 6 - Unemployment Flashcards
labor force
all persons age 16 and over who are either working for pay or actively seeking paid employment
labor-force participation rate
the percentage of the working age population working or seeking employment
production possibilities
the alternative combinations of final goods and services that could be produced in a given time period with all available resources and technology
unemployment
the inability of labor-force participants to find jobs
Okun’s Law
1% more unemployment results in 2% less output
unemployment rate
the proportion of the labor force that is unemployed
discouraged worker
an individual who isn’t actively seeking employment but would look for or accept a job if one were available
underemployment
people seeking full-time paid employment who work only part-time or are employed at jobs below their capability
seasonal unemployment
unemployment due to seasonal changes in employment or labor supply
frictional unemployment
brief periods of unemployment experienced by people moving between jobs or into the labor market
structural unemployment
unemployment caused by a mismatch between the skills (or location) of job seekers and the requirements (or location) of available jobs
cyclical unemployment
unemployment attributable to a lack of job vacancies, that is, to an inadequate level of aggregate demand
full employment
the lowest rate of unemployment compatible with price stability; variously estimated at between 4% and 6% unemployment
natural rate of unemployment
long-term rate of unemployment determined by structural forces in labor and product markets
outsourcing
the relocation of production to foreign countries
