Labour Markets Flashcards
Name four goals of macroeconomists:
economic growth
keeping unemployment low
keeping inflation low
maintaining international equilibrium
Name a crucial determinant of an economy’s performance:
health of labour markets
What happens to the labour market when an economy is growing?
high proportion of the population is in work, putting pressure on wages
What happens to the labour market in a shrinking economy?
decrease in employed population due to decrease in demand
What is the unemployment rate?
the percentage of working-age people who are looking for work
What are the three components that make up the labour market?
those in employment
those looking for employment
those who don’t work (economically inactive)
What classifies someone as employed?
being employed by one or more employers who pay for at least one hour of work a week
What classifies someone as being unemployed?
being without paid work, while actively looking for it, and able to start any offered paid work within two weeks
What are the two methods of measuring unemployment?
labour force survey
claimant count
State the formula used to calculate the unemployment rate.
unemployment rate = 100 * ((number of unemployed) / (labour force))
What is the inactivity rate?
the amount of people not working and not actively looking for work
Why might people be inactive? Give three reasons.
disability or illness
education
caring requirements
State the formula used to calculate the participation rate.
participation rate = 100 * ((labour force) / (working age population))
What are the three types of unemployment?
natural unemployment
frictional unemployment
structural unemployment
Define the natural rate of unemployment.
the point around which the unemployment rate fluctuates
