Chapter 11 - Unemployment

Question 1

Macroeconomic Indicators (3)

Answer 1

1. Unemployment Rate
2. Inflation Rate
3. Economic Growth Rate

Question 2

Unemployed Workers:

Unemployment Rate:

Answer 2

Adults who do not have jobs but are looking for work.

The percentage of the labor force without a job.

Question 3

Someone is unemployed only if:

To be counted as unemployed, a person must be:

Answer 3

He is willing and able to work but cannot find a job.

-16 or older
- Not institutionalized (not in prison or not a student)
- A civilian
- Looking for work

Question 4

Structural Unemployment:

Answer 4

Persistent, long-term unemployment
caused by long-lasting shocks or
permanent features of an economy that
make it more difficult for some workers
to find jobs. (Electricity vs Candle) (CPA vs Turbo Tax)

Question 5

Frictional Unemployment:

Answer 5

Short term unemployment caused by the
ordinary difficulties of matching
employee to employer.

Question 6

Natural Unemployment:

Answer 6

The rate of: structural + frictional
unemployment.

Question 7

Cyclical Unemployment

Answer 7

Unemployment correlated with the
business cycle.

Question 8

Discouraged workers:

Answer 8

Workers who have given up looking for
work but who would still like a job.

• Unemployment Rate - A Bureau of Labor Statistics measure that includes part-time workers who would rather have a full-time position and people who would like to work but have given up looking for a job.

Question 9

Duration Of Unemployment: 2005, 2010

Answer 9

2005:
- 35% lasted less than 5 weeks.
- 30% lasted between 5-14 weeks.

2010:
- 46% lasted more than 27 weeks.

Question 10

“Man-cession” of 2007-2009:

Answer 10

Men bore 78% of job losses during this time.

Question 11

Median Wage:

Answer 11

The wage such that one-half of all
workers earn wages below the median
and one-half of all workers earn wages
above the median.

Question 12

Union:

Answer 12

An association of workers that bargains
collectively with employers over wages,
benefits, and working conditions.

Question 13

Employment At-Will Doctrine:

Answer 13

Says an employee may quit and an
employer may fire an employee at any
time and for any reason. There are
many exceptions to the at-will doctrine,
but it is the most basic U.S. employment
law.
Cannot fire based on: Race, Sex, Religion

Question 14

Active Labor Market Policies:

Answer 14

Policies like work tests, job search
assistance and job retraining programs
that focus on getting unemployed
workers back to work.

Question 15

Unemployed Workers in U.S. usually make __% of their last jobs salary.

In Europe people usually make __%

Answer 15

U.S. - 30%

Europe - 60%

Question 16

Labor Force Participation Rate (LFPR):

Answer 16

The percentage of adults in the labor
force.