Chapter 7 Vocabulary Flashcards
occurs when the introduction of new products and technologies leads to the end of other industries and jobs
creative destruction
caused by recessions or economic down turns
- not good for a healthy economy -
cyclical unemployment
caused by delays in matching available jobs and workers
- good for a healthy economy -
frictional unemployment
caused by creative destruction, when an industry is completely put out of business/replaced
- usually by technology -
- good for a healthy economy -
structural unemployment
the typical unemployment rate that occurs when the economy is growing normally
- usually between about 4% to 5% -
- symbol = u* -
natural rate of unemployment
when the employment rate is equal to the natural rate, the output level produced in the economy
- symbol = Y* -
full employment output
someone who is already employed or actively seeking work
- only work eligible people are counted -
labor force
the portion of the work-eligible population that is in the labor force
labor force participation rate
those who are not working, have looked for a job in the past 12 months and are willing to work, but have not sought out employment in 12 weeks
marginally attached workers
people who are eligible, but not actively seeking work
discouraged workers
workers who have a part-time job but would like to have a full-time job / work more hours
underemployed workers
a worker who is not currently employed and is searching for a job without any success
unemployment
the percentage of the labor force that is unemployed
unemployment rate
- discouraged workers
- underemployment
- who do we count as unemployed
problems with the unemployment measure
unemployment rate formula
UR = (number employed / labor force) x 100
