Chapter 22

Question 0

Working-age population is divided into two groups:

Answer 0

1. People in the labour force.
2. People not in the labour force.
   Labour force is the sum of employed and unemployed workers.

Question 1

The population is divided into two groups:

Answer 1

1. Working age population: Number of people aged 15 years and older who are not in institutional care.
2. People too young to work (under 15 years of age) or in institutional care.

Question 2

Unemployed: in one of three categories:

Answer 2

1. Without work but has made efforts within four weeks.
2. Waiting to be called back to a job from which they have been laid off.
3. Waiting to start a new job within four weeks.

Question 3

Unemployment rate:

Answer 3

Percentage of labour force that is unemployed.

(# of people unemployed/labour force) x 100

Question 4

Employment to population ratio:

Answer 4

(Employment/working age population) x 100

Question 5

Marginally attached workers:

Answer 5

person who currently is working nor looking for work, but has indicated that they want and is available for a job and has looked for work sometimes in the past.

Question 6

Discouraged worker:

Answer 6

Marginally attached worker who has stopped looking for a job because of repeated failure to find one.

Question 7

Neoclassical Growth Theory:

Answer 7

Proposition that real GDP per person grows because technological change induces a level of saving and investment that makes capital per hour of labour grow.

Question 8

Marginal Diminishing Returns

Answer 8

Every capital that we buy (machine) produces less and less. If we buy Capital, it’ll destroy capital and not let it grow.

Question 9

Problem with Neoclassical Growth Theory

Answer 9

Circulate money all over the world. Till all economy will converge and then everything will be the same.

Question 10

New growth Theory

Answer 10

Economic growth can be indefinite. Technology is endogenous.

Question 11

New growth theory: two facts about market economies:

Answer 11

• discoveries result from choices.

- Discoveries bring profit and competition destroys profit.

Question 12

Two further facts play a key role in the new growth theory:

Answer 12

• Discoveries are a public capital good.
• Knowledge is not subject to diminishing returns.
• Knowledge capital does not experience diminishing returns.