Chapter 22 - Unemployment, Inflation, and Long-Run Growth

Question 1

employed

Answer 1

Any person 16 years old or older (1) who works for pay, either for someone else or in his or her own business for 1 or more hours per week, (2) who works without pay for 15 or more hours per week in a family enterprise, or (3) who has a job but has been temporarily absent with or without pay.

Question 2

unemployed

Answer 2

A person 16 years old or older who is not working, is available for work, and has made specific efforts to find work during the previous 4 weeks.

Question 3

not in the labor force

Answer 3

A person who is not looking for work because he or she does not want a job or has given up looking.

Question 4

labor force

Answer 4

The number of people employed plus the number of unemployed

Question 5

unemployment rate

Answer 5

The ratio of the number of people unemployed to the total number of people in the labor force.

Question 6

labor force participation rate

Answer 6

The ratio of the labor force to the total population 16 years old or older.

Question 7

discouraged-worker effect

Answer 7

The decline in the measured unemployment rate that results when people who want to work but cannot find jobs grow discouraged and stop looking, thus dropping out of the ranks of the unemployed and the labor force.

Question 8

frictional unemployment

Answer 8

The portion of unemployment that is due to the normal turnover in the labor market; used to denote short-run job/skill-matching problems.

Question 9

structural unemployment

Answer 9

The portion of unemployment that is due to changes in the structure of the economy that result in a significant loss of jobs in certain industries.

Question 10

natural rate of unemployment

Answer 10

The unemployment rate that occurs as a normal part of the functioning of the economy. Sometimes taken as the sum of frictional unemployment rate and structural unemployment rate.

Question 11

cyclical unemployment

Answer 11

Unemployment that is above frictional plus structural unemployment.

Question 12

consumer price index (CPI)

Answer 12

A price index computed each month by the Bureau of Labor Statistics using a bundle that is meant to represent the “market basket” purchased monthly by the typical urban consumer.

Question 13

producer price indexes (PPIs)

Answer 13

Measures of prices that producers receive for products at all stages in the production process.

Question 14

real interest rate

Answer 14

The difference between the interest rate on a loan and the inflation rate.

Question 15

output growth

Answer 15

The growth rate of the output of the entire economy.

Question 16

per-capita output growth

Answer 16

The growth rate of output per person in the economy.

Question 17

productivity growth

Answer 17

The growth rate of output per worker.