Exam 1 (ch. 7 and 8) Review

Exam 1 (ch. 7 and 8) Review - Chapter 7 Unemployment the...

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Chapter 7 Unemployment – the total number of adults (aged 16 years or older) who are willing and able to work and who are actively looking for work but have not found a job; number of unemployed divided by the number of workers in the civilian labor force then multiply by 100; reached historical low during WWII of 1.2% and a historical high of 25% during Great Depression (1930s) Labor Force – individuals aged 16 years or older who either have jobs or who are looking and available for jobs; the number of employed plus the number of unemployed Stock – the quantity of something, measured at a given point in time – for example, an inventory of goods or a bank account. Stocks are defined independently of time, although they are assessed at a point in time. Flow – a quantity measured per unit of time; something that occurs over time, such as the income you make per week or per year or the number of individuals who are fired every month Job loser – an individual I the labor force whose employment was involuntarily terminated Reentrant – an individual who used to work full time but left the labor force and has now reentered it looking for a job Job leaver – an individual in the labor force who quits voluntarily New entrant – an individual who has never held a full-time job lasting two weeks or longer but is now seeking employment Discouraged workers – individuals who have stopped looking for a job because the are convinced that they will not find a suitable one Labor force participation rate – the percentage of noninstitutionalized working-age individuals who are employed or seeking employment Frictional unemployment – unemployment due to the fat that workers must search for appropriate job offers. This takes time, and so they remain temporarily unemployed. Structural unemployment – unemployment resulting from a poor match of workers’ abilities and skills with current requirements of employers Cyclical unemployment – unemployment resulting from business recessions that occur when aggregate (total) demand is insufficient to create full employment Seasonal unemployment – unemployment resulting from the seasonal pattern of work in specific industries. It is usually due to seasonal fluctuations in demand or to changing weather conditions, rendering work difficult, if not impossible, as in the agriculture, construction, and tourist industries. Full employment – an arbitrary level of unemployment that corresponds to “normal” friction in the labor market. In 1986, a 6.5 percent rate of unemployment was considered full employment. Today, it is assumed to be around 5 percent. Natural rate of unemployment –
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This test prep was uploaded on 04/07/2008 for the course ECON 103 taught by Professor Downing during the Fall '06 term at Danville Area CC.

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Exam 1 (ch. 7 and 8) Review - Chapter 7 Unemployment the...

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