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Econ 114 > Chapter 9 > Flashcards

Chapter 9 Flashcards

1
Q

What are the 3 groups of Population (having to do with unemployment)

A
  1. employed
  2. unemployed
  3. not in the labour force
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2
Q

labour force

A

the total # of workers, including the employed and unemployed.

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3
Q

A person is considered ______ if he or she has spend most of the previous week working at a paid job.

A

employed

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4
Q

A person is _______ if he or she is on temporary layoff, is looking for a job, or is waiting for the start date of a new job.

A

unemployed

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5
Q

Not in the labour force includes?

A

everyone who isn’t employed or unemployed

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6
Q

What is the “u-rate” ?

A

unemployment rate: % of the labour force that is unemployed.

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7
Q

Define: the % of the adult population that is in the labour force?

A

labour force participation rate

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8
Q

Is unemployment changed? If so how?

Sue lost her job and begins looking for a new one.

A

Yes , unemployment rises

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9
Q

Is unemployment changed? If so how?

Jon, has been out of work since last year, and gives up looking for new work.

A

unemployment rate falls.. Jon is no longer counted as unemployed, and not in the labour force.

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10
Q

Is unemployment changed? If so how?

Sam,thesoleearnerinhisfamilyof5,justlosthis $80,000 job as a research scientist. Immediately, he takes a part-time job at McDonald’s until he can find
another job in his field.

A

wont affect unemployment rate. was rehired.

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11
Q

What does the Unemployment rate not account for?

A
  1. whether a person is unemployed or a person is not in the labour force
  2. People who have given up looking for work don’t show up on the U rate
  3. People claim unemployment assistance even when they aren’t working
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12
Q

Is there ALWAYS some unemployment?

A

yes

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13
Q

the rate of unemployment to which economy tends to return in the long run is…

A

natural rate of unemployment

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14
Q

Define: the deviation of unemployment from its natural rate?

A

Cyclical unemployment

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15
Q

What are the 2 types of unemployment ?

A

Frictional unemployment

Structural unemployment

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16
Q

Frictional unemployment

A

occurs when workers spend time searching for the jobs that best suit their skills and tastes (short-term)

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17
Q

Define: what occurs when there are fewer jobs than workers (longer-term)

A

Structural unemployment

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18
Q

Job search is..

A

the process of matching workers with appropriate jobs

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19
Q

changes in the composition of demand across industries or regions of the country

A

sectoral shifts

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20
Q

frictional unemployment is inevitable. T or F?

A

True

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21
Q

Define: these provide information about job vacancies to speed up the matching of workers and jobs

A

government employment agencies

22
Q

Public training programs

A

aim to equip workers displaced from declining industries with the skills needed in growing industries.

23
Q

Define: Employment Insurance (EI)

A

a govt program that partially protects workers’ incomes when they become unemployed.

24
Q

T or F: Employment insurance (EI) increases frictional unemployment

A

True; people respond to incentives

25
Q

The minimum wage may exceed the equilibrium wage for the least skilled or experienced workers, causing ______ _______.

A

Structural unemployment

26
Q

When the wage is above the equilibrium level, the quantity of labour supplied _______ the quantity of labour demanded.

A

exceeds; workers are unemployed because they are waiting for jobs to open up. structural unemployment

27
Q

Union

A

a worker association that bargains with employers over wages, benefits, and working conditions.

28
Q

do union workers earn higher wages?

A

yes by 20%

29
Q

collective bargaining

A

the process by which unions and firms agree on the terms of employment.

30
Q

when the union organizes a withdrawal of labour from the firm, or union and firm can’t agree

A

a Strike

31
Q

When unions raise the wage above equilibrium, quantity of labour demanded ____.

A

falls; unemployment results

32
Q

Union “insiders”

A

workers who remain employed, they are better off

33
Q

Union “outsiders”

A

workers who lose their jobs, they are worse off

34
Q

Where do Union outsiders go?

A

non-unionized labour markets.

35
Q

how do non-unionized labour markets compare to unions?

A

non-union: increases labour lsupply and reduces wages.

36
Q

Efficiency Wages

A

firms voluntarily pay above-equilibrium wages to boost worker productivity

37
Q

4 reasons of Efficiency wages:

A

Worker health
worker turnover
worker quality
worker effort

38
Q

Define: Hiring & training new workers is costly. Paying high wages gives workers more incentive to stay.

A

Worker turnover; reduces turnover

39
Q

Define: paying higher wages allows orkers to eat better, makes them healthier, and more productive.

A

worker health; in less developed poorly nourished countries

40
Q

Worker Quality

A

offering higher wages attracts better job applicants, increases quality of the firm’s workforce

41
Q

Workers can work hard or shirk. Shirkers are fired. workers have more incentive to work and not shirk if the wage is above equilibrium

A

Worker Effort

42
Q

Which would reduce frictional unemployment?

A. The govt eliminates the minimum wage.
B. The govt increases Employment insurance
benefits.
C. A new law bans labour unions.
D. More workers post their resumes at Monster.ca, and more employers use Monster.ca to find suitable workers to hire.
E. Sectoral shifts become more frequent

A

D ; likely to speed up the process of matching workers and jobs.

43
Q

Which would be most likely to increase frictional unemplyment?
A. The govt eliminates the minimum wage.
B. The govt increases Employment insurance
benefits.
C. A new law bans labour unions.
D. More workers post their resumes at Monster.ca, and more employers use Monster.ca to find suitable workers to hire.
E. Sectoral shifts become more frequent

A

B, E ;

44
Q

Which would reduce structural unemployment?

A. The govt eliminates the minimum wage.
B. The govt increases Employment insurance
benefits.
C. A new law bans labour unions.
D. More workers post their resumes at Monster.ca, and more employers use Monster.ca to find suitable workers to hire.
E. Sectoral shifts become more frequent

A

A, C;

45
Q

The natural rate of unemployment consists of what 2 things?

A

frictional unemployment

structural unemployment

46
Q

______ and _____ ______ participation rates vary widely across demographic groups.

A

Unemployment, labour force

47
Q

Natural rate of unemployment is the ____ rate of unemployment. The ____ rate fluctuates.

A

normal; actual

48
Q

Cyclical unemployment is the deviation of unemployment from its ______ rate and is connected to ____ ____ economic fluctuations.

A

natural; short term

49
Q

The natural rate includes _____ unemployment and _____ unemployment.

A

frictional and structural

50
Q

________ unemployment occurs when workers take time to search for the right jobs.

A

frictional

51
Q

________ unemployment occurs when above equilibrium wages result in a surplus of labour

A

structural

52
Q

What are the 3 reasons for above-equilibrium wage (structural unemployment) include:

A

minimum wage laws
unions,
efficiency wages

Econ 114 (6 decks)

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