Gross Measures - Employment/Unemployment

Question 1

Define “official full employment”.

Answer 1

Officially, full employment exists where there is no cyclical unemployment. When there is official full employment, there could still be frictional, structural, and/or seasonal unemployment.

Question 2

Define “frictional unemployment”.

Answer 2

Unemployment in which members of the labor force are not employed because they are in transition between jobs or have imperfect information about job opportunities.

Question 3

Identify characteristics that exclude individuals from the labor (or work) force.

Answer 3

The following are not included in the labor force:

1. Those less than 16 years old
2. The retired
3. Those not actively seeking work
4. Those who are institutionalized
5. Military members on active duty

Question 4

Define “cyclical unemployment”.

Answer 4

Unemployment in which members of the labor force are not employed because a downturn in the business cycle has reduced the current need for workers.

Question 5

Define “seasonal unemployment”.

Answer 5

Unemployment in which members of the labor force are not employed because their work opportunities regularly and predictably vary by the sea on of the year.

Question 6

Define “structural unemployment”.

Answer 6

Unemployment in which member of the labor force are not employed because their prior types of jobs have been greatly reduced or eliminated, and/or because they lack the skills needed for available jobs.