Chapter 2 Flashcards
1
Q
Why is unemployment a problem
A
- Lost income and production
The loss of a job brings a loss of income and lost production
Lost production mean lower consumption, and lower investment
In capital and this lowers the living standard in both present and future - Lost human capital
Prolonged unemployment permanently damages a persons job prospects by destroying human capital
2
Q
Define unemployment,ent rate
A
The percentage of the labor force that is unemployed
3
Q
Define the employment to population ratio
A
The percentage of the workin* age population that is employed
4
Q
Define the labor participation rate
A
The percentage of the working age population in the labor force
5
Q
What is the most costly unemployment
A
Long-term unemployment from job loss
6
Q
What is frictional unemployment
A
Arises from normal labor operations
