Macroeconomics Ch 6: Unemployment – Flashcards
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labor force
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all persons age 16 and over who are either working for pay or actively seeking paid employment
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labor-force participation rate
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the percentage of the working-age population working or seeking employment
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unemployment
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the inability of labor-force participants to find jobs
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Okun's Law
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1 percent more unemployment results in 2 percent less output
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unemployment rate
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the proportion of the labor force that is unemployed
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discouraged workers
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People who are available for work but have given up seasrching for work because they believe no jobs are available for them
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underemployment
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people seeking full-time paid employment who work only part-time or are employed at jobs below their capacity
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seasonal unemployment
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unemployment due to seasonal changes an employment or labor supply
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frictional unemployment
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brief periods of unemployment experienced by people moving between jobs or into the labor market
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structural unemployment
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unemployment caused by a mismatch between the skills (or location) of job seekers and the requirements (or location) of available jobs
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cyclical unemployment
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unemployment attributable to a lack of job vacancies, that is, to an inadequate level of aggregate demand
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full employment
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the lowest rate of unemployment compatible with price stability; variously estimated at between 4% and 6% unemployment
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outsourcing
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the practice of a company having its work done by another in a foreign country
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offshoring
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the practice of work for a company performed by the company's employees located in a foreign country
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GDP Gap
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the difference between actual real GDP and full-employment real GDP
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business cycle
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alternating periods of economic growth and contraction, which can be measured by changes in real GDP
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peak
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the phase of the business cycle in which real GDP reaches its maximum after rising during a recovery
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recession
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a downturn in the business cycle during which real GDP declines and the unemploment rate also rises (also called a contraction)
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trough
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the phase of the business cycle in which real GDP reaches its minimum after falling during a recession
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expansion
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an upturn in the business cycle during which real GDP rises (also called a recovery)
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economic growth
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an expansion in national output measured by the annual percentage increase in a nation's real GDP
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leading indicators
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variables that change before real GDP changes
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coincident indicators
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economic indicators that usually change at the same time as changes in overall business activity
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lagging indicators
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variables that change after real GDP changes
