Week 11 - Labour markets Flashcards
1
Q
What defines unemployment?
A
- Not employed or self-employed
- Able to work
- Actively seeking work
2
Q
What is the employment rate?
A
Employed/W.A.P
3
Q
What is the unemployment rate?
A
Unemployed/Labour Force
4
Q
What is the ‘real wage’?
A
The nominal wage divided by the price level of the bundle of consumer goods purchased
real wage = W/P
W - nominal wage
P - price level
5
Q
What is the wage-setting curve?
A
A curve that represents the real wage necessary for employers to provide to workers at different participation rates to incentivise workers to work.
The higher the unemployment rate, the less the firms pay workers.
