Test Two Study Sheet

Test Two Study Sheet - Economics Test #2 Review: How is the...

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Economics Test #2 Review : How is the unemployment rate computed, i.e., who's counted? The BLS (Bureau of Labor Statistics) conducts a nationwide random survey of some 60,000 households each month to determine who is employed and who is not employed. The BLS divides the total US population into three groups, one group is made up of people under 16 years old, and people who are institutionalized; they are not considered potential members of the labor force. The second group is the “not in labor force” which is compiled with adults who are potential workers but are not employed and are not seeking work. The third group is the labor force, which is 50% of the total population in 2005. The labor force consists of people who are able and willing to work. Those who are unemployed but actively seeking work are counted as being in the labor force. Unemployed are those greater than 16, who are looking and available for full time work. Average Annual Unemployment Rate= Frequency (% of workforce) X Duration (% of year out of work) Unemployment in US Rate = # Unemployed # Employed + # Unemployed Discuss the types of unemployment and their causes. 1) Frictional Unemployment - consisting of search unemployment and wait unemployment for workers who are either searching for jobs or waiting to take jobs in the near future. The word “frictional” implies that the labor market does not operate perfectly and
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This note was uploaded on 04/07/2008 for the course ECO 201 taught by Professor Jantzen during the Spring '08 term at Iona.

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Test Two Study Sheet - Economics Test #2 Review: How is the...

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