Chapter 8 Flashcards
Employment
The number of people currently employed in the economy, either full time or part time
Unemployment
The number of people who are actively looking for work but arent currently employed
Labor force
The sum of employment and unemployment
Labor force participation rate
The percentage of the population aged 16 or older that is in the labor force
Labor force
Population age 16 and older X 100
Unemployment rate
The percentage of the total number of people in the labor force who are unemployed
Number of unemployed workers
Labor force X 100
Discouraged workers
Nonworking people who are capable of working but have given up looking for a job given the state of the job market
Marginally attached workers
Would like to be employed and have looked for a job in the recent past but are not currently looking for work
Underemployment
The number of people who work part time because they cannot find full-time jobs
Economic expansioins arent always __________
Periods of falling unemployment
Although economy is growing, it is not growing fast enough to reduce the unemployment rate
jobless recovery
A period in which the real GDP growth rate is positive but the unemployment rate is still rising
Average GDP growth for US
3.25%
when above - unemployment falls
when below - unemployment rises
Job search
Woerkers who wpend time looking for employment are engaged in a job search
Frictional unemployment
Unemployment due to the time workers spend in job search
long-term unemployed
unemployed for 27 or more weeks
structural unemployment
More people are seeking jobs in a particular labor market than there are jobs available at the current wage rate, even when the economy i s at the peak of a business cycle
collective bargaining
Intended to tip the scales of bargaining power more toward workers and away from employers
labor strike
a collective refusal to work
efficiency wages
wages that employers set above the equilibrium wage rate as an incentive for better employee performance
Eurosclerosis
The persistent high unemployment in Europe because of generous unemployment benefits
Natural rate of unemployment
The unemployment rate that arises from the effects of frictional plus structural unemployment
Frictional + Structional = Natural
Cyclical unemployment
The deviation of the actual rate of unemployment from the natural state due to downturns in the business cycle.
Actual = natural + cyclical
Cyclical = Actual - Natural
Real wage
wage rate
price level
Real income
Income
Price level
Inflation rate
Price index in year 2 - year 1
Price index year 1 X 100
shoe-leather costs
The increased costs of transactions caused by inflation
Menu cost
The real cost of changing a listed price
unit-of-account costs
Arise from the way inflation makes money a less reliable unit of measurement
ex. pg. 231 in book
interest rate
On a loan, is the price, calculated as a percentage of the amount borrowed, that a lender charges a borrower for the use of their savings for one year
nominal interst rate
the interest rate expressed in dollar terms
real interst rate
the nominal interest rate minus the rate of inflation
