Macro Midterm Flashcards
Employed
paid employees, both full and part-time workers are counted
Unemployed
are available for work, and had tried to find employment during the previous four weeks
Not in labor force
ex. full-time students, homemakers, and retirees
Labor force equation
labor force = number of employed + number of unemployed
Unemployment rate equation
Unemployment rate = (number of unemployed/labor force) x 100
Labor-force participation rate
Labor-force participation rate = (labor force / adult population) x 100
Cyclical unemployment
natural rate of unemployment
Discouraged workers
individuals may have given up looking for a job after an unsuccessful search
Duration of unemployment spells
most spells of unemployment are short, but most unemployment observed at any given time is long-term
Frictional unemployment
takes time for workers to find the jobs that best suit then and for firms to find the workers that best fill their needs, explains relatively short spells of unemployment
Structural unemployment
number of jobs available is less than the number of people looking for work
Job search
process of workers finding appropriate jobs
Unemployment insurance
offers workers partial protection against job loss
Minimum wage above equilibrium point
if wage is kept above the equilibrium level for any reason, unemployment results
Union
worker association that bargains with employers over wages, benefits, and working conditions
Collective bargaining
process by which unions and firms agree on the terms of employment
Strike
union can organize a withdrawal of labor from the firm
Efficiency wages
firms operate more efficiently if wages are above the equilibrium, level, more profitable for firms to keep wages high despite a surplus of labor
Benefits of high wages
worker health, worker turnover, worker quality, worker effort, worker morale
