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Econ vocab
Chapter 14- unemployment
| Term | Definition |
|---|---|
| Unemployment | the condition of not having a job but being a member of the labor force; person must be jobless but actively search for job in last four weeks. |
| employed | the condition of having a job. |
| labor force | the number of employed plus unemployed people age sixteen and over. |
| unemployment rate | is equal to the number of unemployed persons divided by the number of people in the labor force. |
| labor force participation rate | the labor force divided by the working age population. |
| marginally attached workers | people ready and available to work (have conducted job search within past 12 months but not in last 4 weeks); not counted in official unemployment rate. |
| discouraged workers | people not officially classified as unemployed; have given up job search; official unemployment rate understates actual unemployment. |
| U3 | the official unemployment rate; (all Unemployment rates are published by the BLS). |
| U1 | the unemployment rate that only includes people unemployed fifteen weeks or longer. |
| U2 | unemployment rate that only indicates people who have lost a job as opposed to those who have quit or those who have entered or returned the labor force. |
| U4 | unemployment rate that adds discouraged workers to the official unemployment rate. |
| U5 | unemployment rate that includes all marginally attached workers. |
| U6 | most all-inclusive measure of unemployment; includes all those listed in U1-U5 plus those who are employed part time. |
| Frictional unemployment | always exist in an economy; voluntary unemployment; occurs when a person enters labor force and looks for a job. |
| structural unemployment | unemployment caused by the permanent destruction of jobs in a dying industry, mismatch between skills necessary for employment and seekers's skill set, and government programs that create incentives to remain unemployed. |
| creative destruction | refers to the ongoing process of technological innovation and industrial decline. death of old industry frees land, labor, capital, and entrepreneurship. |
| cyclical unemployment | Unemployment associated with downturns in the business cycle. economist believe that government intervention is necessary to prevent. |
| full employment | level of employment when the economy is productively efficient; associated w/ economy @ natural rate of unemployment. |
| natural rate of unemployment | rate of unemployment that exist when there is no cyclical unemployment present in the economy; thought to be independent from inflation rate. |
Created by:
Jrendon
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