Unemployment And Its Natural Rate Flashcards
What is the natural rate of unemployment
It is the rate of unemployment to which the economy tends to return in the long run.
What is Cyclical Unemployment
It is the deviation of unemployment from its natural rate.
What is the labour force
It is the total number of workers, including both the employed and the unemployed.
What is the unemployment rate
It is the percentage of the labour force that is unemployed.
What is the Unemployment rate formula
U = No. of unemployed
—————————— × 100
LF
What is the labour force participation rate
It is the percentage of the adult population that is in the labour force.
What is the labour force participation rate formula
LFPR = LF
—————————- × 100
Adult population
What is frictional unemployment
It is unemployment that results because it takes time for workers to search for jobs that best suit their tastes and skills.
The actual unemployment rate fluctuates in the short run around the long run trend.
A. True
B. False
True
What is a job search
Job search is the process by which workers find appropriate jobs given their tastes and skills.
Changes in the composition of demand among industries or regions are called sectoral shifts.
A. True
B. False
True
What is employment insurance
It is a government program that partially protects worker’s income when they become unemployed.
What is structural unemployment
It is the unemployment that results because the number of jobs available in some labour markets is insufficient to provide a job for everyone who wants one.
What are efficiency wages
It is the above-equilibrum wages paid by firms in order to increase worker productivity.
What are discouraged searchers
They are individuals who would like to work but have given up looking for a job.
