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Chapter 10 Macro
| Term | Def |
|---|---|
| Employed | Paid Emloyees, self-employed, workers in a family business, unpaid workers |
| Unemployed | Not working and have looked for work during the previous 4 weeks |
| Not in the labor force | Everyone else; retired, under 16, full-time students/parents, disablilites, unpaid homemaker, volunteer |
| Discouraged workers | People who are unemployed and looking for a job but then give up looking for a job |
| Labor force | employed + unemployed |
| Unemployment rate | # of unemployed divided by labor force |
| Labor force participation rate | labor force divided by adult population; excludes people under 16 |
| Natural rate of unemployment | thought to be around 5% |
| Frictional unemployment | -workers in the process of moving from one job to another -workers' tastes and skills -job requirements -short-term for most workers |
| Sectoral shifts | one part of the economy is shrinking and another is growing |
| Policies affecting job search | employment agencies, training programs, and unemployment insurance (Effects: income protection, more time to search = better job matches = greater productivity) |
| Structural unemployment | -not having enough jobs to go around because wage is high - occurs when wage is above equilibrium - usually long-term |
| frictional + structural | normal rate of unemployment around which the actual unemployment rate fluctuates |
| Wage is above equilibrium because of... (Structural unemployment) | minimum wage laws, unions, efficiency wages |
| Efficiency wages | firms voluntarily pay above-equilibrium wages to boost worker productivity; worker health, worker turnover, worker equality, worker effort |
| Cyclical unemployment | unemployment associated with the business cycle |
| natural unemployment | the amount of unemployment that exists even when the economy is healthy, due to social or political factors |
| labor union | an organization of workers that negotiates with employers, as a group, over wages and working conditions |
| unemployment insurance | does not help reduce frictional employment |
| If a job is lost and person immediately begins searching for another... | increases unemployment rate and labor-force participation rate is uneffected |
| Wage in excess of their equilibrium level help explain... | both structural unemployment and natural rate of unemployment |
| When unions raise wages in some sectors of the economy, the supply of labor in other sectors of the economy... | increases, reducing wages in industries that are not unionized |
Created by:
bchacon
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