Module 6 Unemployment-Vocab

Question 1

Cyclical unemployment

Answer 1

Unemployment that is attributed to economic contractions or downturns in the economy.

Question 2

Derived demand

Answer 2

Demand for a factor of production or intermediate good that occurs as a result of the demand for another intermediate or final good.

Question 3

Discouraged worker

Answer 3

A person of legal employment age who is not actively seeking employment or who has not found employment after a long period of unemployment and has given up looking for work.

Question 4

Employed person

Answer 4

An individual 16 years and over in the civilian non-institutional population who has paid employment or is working in a self-employed capacity.

Question 5

Efficiency wage theory

Answer 5

The economic theory that holds wages in labor markets reflect wages above the value of marginal product in order to increase productivity.

Question 6

Frictional unemployment

Answer 6

Unemployment that occurs as workers move between jobs.

Question 7

Institutional wage theory

Answer 7

The economic theory that holds institutional systems of worker protection laws can and should be a factor influencing employment and wages.

Question 8

Labor force

Answer 8

The number of adult persons in an economy who are willing and able to work.

Question 9

Labor market

Answer 9

A theoretical construct to analyze the exchange of labor with wages being the price of labor and employment being the point where the quantity demanded of labor is equal to quantity supplied of labor.

Question 10

Labor force participation rate

Answer 10

The percentage of adults in an economy who are either employed or who are unemployed and looking for a job.

Question 11

Marginal productivity wage theory

Answer 11

Economic theory that wages in labor markets should be set equal to the value of an employee’s marginal product.

Question 12

Natural Rate of Unemployment

Answer 12

The level of unemployment that is the result of the combination of economic, social, and political factors that exist at a time when the economy is in a healthy state or at its natural potential of output.

Question 13

Seasonal unemployment

Answer 13

Unemployment that is the result of the demand for a specific kinds of work changing as seasons change.

Question 14

Structural unemployment

Answer 14

Unemployment that is the result of workers lacking skills valued by the labor market.

Question 15

Underemployed person

Answer 15

Worker that is trained or skilled for one type or level of work but is working in a lower paying job that does not utilize his/her skill set.

Question 16

Unemployed person

Answer 16

A person 16 years and older who is not employed, is available for work, and is making specific efforts to find employment

Question 17

Unemployment rate

Answer 17

The percentage of unemployed persons to the total number of persons in the labor force.