Topic 8- Unemployment and its Natural Rate

Question 1

What is the working age population

Answer 1

people who are 15+ and LEGALLY ENTITLED TO WORK IN CANADA!!!!!!!!!!!1

Question 2

Employed

Answer 2

Anyone who works a job (part time or full time)

Question 3

Unemployed

Answer 3

People who are willing and able to work, looking for work, but can not find work

THEY HAVE LOOKED FOR WORK IN THE LAST 4 WEEKS

Question 4

Labour force

Answer 4

Employed+Unemployed

Question 5

Who is not in the labour force

Answer 5

people who are not looking for work,

UNABLE AND UNWILLING TO WORK

Question 6

What is the unemplyment rate?

Answer 6

% of workforce that is unemployed

RATE= (Number of unemployed/Labour force) x 100

Question 7

Is the unemployment rate perfect?
why does it understate

Answer 7

-discoruaged workers are counted as not part of the labour force (they are willing and able butGIVE UP LOOKING FOR WORK)

-emmployed is FULL TIME OR PART TIME, so technically if youre looking for a full time job while working part time youre not unemployed

Question 8

DISCOURAGED WORKERS

Answer 8

workers who are willing and able to work but they can not find work SO THEY GIVE UP (counted as not part of the labour force)

Question 9

why does unemployment rate not accurate? OVERSTATES

Answer 9

-people might lie saying they looking for work so they get EI (they are not part of labour force)

• people might be employed but illegally/say theyre not to get out of taxes (they are part of of the labour force)

Question 10

Labour force particiapation rate

Answer 10

the % of the working age population that is in the labour force

LABOUR FORCE/WORKING AGE POP x 100

Question 11

What are two groups in working age pop

Answer 11

in labour force
outside labour force

Question 12

Employment population ratio

Answer 12

% of the working age pop that is employed

Employ ratio = # employed/ working age pop x 100

Question 13

Types of unemployment

Answer 13

frictional
structural
cyclical
seasonal

Question 14

frictional unemployment

Answer 14

short term that arises from the process of mathcing workers with jos

THIS IS IN THE MIDDLE OF JOB SEARCH!

Question 15

Structural unemployment

Answer 15

unemployment from persistent mismatch between the skills and attributes of workers and the requirements of jobs

LONG PERIOD UNEMPLOYMENT

they are frequently forced to recieve training in new areas before they can find a new job

Question 16

when does structiral unemploy occur

Answer 16

when demand for a specific kind of skill falls

when oil workers lose jobs

Question 17

cylical unemplyment

Answer 17

unemply bc business cycle recession! drop in aggregate demand for almost all products!!

Workers whose firms laid them off due to low sales during recession

Question 18

Seasonal unemployment

Answer 18

unemoplyment due to seasons, like farm work/ or fluctuating demadn for work

Question 19

what is the natural rate of unemply

Answer 19

people are always entering or reentering the labour force between jobs!!!!

IT IS NEVER 0, it is the sum of FRICTIONAL AND STRUCTURAL UNEMPLOYMENT

Question 20

NATURAL RATE UNEMPLOY FORMULA

Answer 20

FRICTIONAL UNEMPLOY+STRUCURAL UNEMPLOY

Question 21

when all unemploy is due to frictional and structural?

Answer 21

IT IS CALLED FULL EMPLOYMENT

Question 22

what is full employment gdp

Answer 22

refered to as potential GDP

Question 23

how can govt decrease frictional unemploymnet

Answer 23

pursue policies that speed up the process of matching employees w employers

Question 24

how can govt decrease structural unemploy

Answer 24

provide govt training programs to the structurally unemplyed!

pay subsidied to firms that provide trianing to displaced workers

Question 25

how can govt decrease cyclical unemploy

Answer 25

EXPANSIONARY FISCAL POLICY to increase output thorugh increasing govt spending and decreasing taxes

using expansinosry monetary polucy to increase output thorugh cutting interest rates

Question 26

what can govt do to solve seasonal unemploy

Answer 26

create jobs in off season

Question 27

what govt policies in crease the unemploy rate
EI

Answer 27

EI BENEFITS!!
gives benefits to newly job loss workers (lost job bc no perosnla fault) paid 55% earnign fro 45 weeks max

Question 28

what govt policies in crease the unemploy rate/increase the min wage

Answer 28

ei
min wage
union
efficiency wages

Question 29

Min wage laws effect on unemploy rate

Answer 29

min wage IS LOWEST WAGE employer can pay an employee!!

raising the min wage creates more supply of labour then demadn- UNEMPLOYMENT

Question 30

Labour Union, effect on unemploy rate

Answer 30

orgs of workers that bargain w employees for higher wages and better working conditions for members

Unionized industries have jhigher wages and better working confitons-? result in less people hired

Question 31

what happens when supply of labour >demand of labour

Answer 31

UNEMPLOYMENT

Question 32

Efficiency Wages, effect on unemployment

Answer 32

many firms pay wages that Are HIGHER ! because the employees morale and commitment essentaily to work quality!!!!!!

Question 33

what does lower unemployment do

IDK THIS BRO WTF

Answer 33

lower unemployment makes it more attractive for employed woreks to quit

lower unemploy leads to high er wages

Question 34

when unemply rate is increased, then the

Answer 34

min wage is higher!!!!!!!

Question 35

When you retire do you leave workig age pop

Answer 35

NO! ALWAYS IN IT IF U ARE +15