Econ 260 CH 07 Study Plan

By providing information and reducing the costs of job​ search, the​ Internet's impact on the job market is to reduce

frictional unemployment

The levels of frictional and structural unemployment are used in part to determine our​ (somewhat arbitrary) measurement of the ____ rate of unemployment

natural

Labor force

(Adult, non-institutionalized, non-military population) x (labor force participation rate) = labor force

labor force participation rate

(Labor Force)/Adult Poplation

Determine number of employed adults from labor force and unemployed adults

(labor force) - (unemployment) = employed adults

Calculate this nation's structural unemployment rate

3% (the same 3 remained unemployed constantly so I guessed =/)

Suppose that a nation has a labor force of 100 people. In​ January, Amy,​ Barbara, Carine, and Denise are​ unemployed; in​ February, those four find​ jobs, but​ Evan, Francesco,​ George, and Horatio become unemployed. Suppose further that every​ month, the previous four who were unemployed find jobs and four different people become unemployed. Throughout the​ year, however, the same three people — ​Ito, Jack, and Kelley— continually remain unemployed because their skills are a poor match with​ employers' requirements. Calculate this​ nation's frictional unemployment rate.

4.00% Frictional unemployment rate = [(Frictional Unemployment)/(Labor Force)] x 100

Calculate the​ nation's unemployment rate

7.00% [(Frictional + Structural)/(Labor Force)] x 100

_______ unemployment occurs because of transaction costs in the labor market. For​ example, workers do not have full information about vacancies and must search for jobs.

Frictional

Individuals who have stopped looking for a job because they are convinced they will not find a suitable one are classified as unemployed.

False

Structural unemployment is related to the movement of workers from​ low-paying to​ high-paying jobs.

False

When the economy is at full​ employment, the unemployment rate is zero.

False

Whereas overall labor force participation on net has risen only modestly since World War​ II, there has been a major increase in _____ labor force participation.

Female

The duration of unemployment affects the unemployment rate. If the duration of unemployment​ increases, the measured unemployment rate will _____, , even though the number of unemployed workers may remain the same.

Increase

According to the Bureau of Labor​ Statistics, an unemployed individual whose employment was involuntarily terminated is classified as a

Job Loser

The unemployed are classified as ____, _____, _____, and _____ to the labor force. The flow of people departing jobs and people acquiring jobs determines the stock of the unemployed as well as the stock of the employed.

Job losers Re-entrants Job leavers New entrants

Which of the following measures will lower the natural rate of​ unemployment?

More high school graduates enter college without looking for employment right away.

Cyclical unemployment results from business recessions.

True

The labor force is equal to the number of employed plus the number of unemployed.

True

Unemployment due to the fact that workers must search for appropriate job offers is called frictional unemployment.

True

_____ persons are adults who are willing and able to work and are actively looking for a job but have not found one. The unemployment rate is computed by dividing the number of unemployed by the total ____ which is equal to those who are employed plus those who are unemployed.

Unemployed labor force

Frictional​ unemployment

Unemployment due to the fact 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.

Determine unemployment rate from unemployed adults and labor force

[(unemployed adults)/(labor force)] x 100

Internet job​ sites, like​ Monster.com, have led potential employees to find jobs via the internet almost instantly. This has caused

a fall in frictional unemployment.

The type of unemployment that rises as the economy goes into a recession is called

cyclical

Consider an economy where the natural rate of unemployment is equal to 3​%. If the actual unemployment rate is equal to 6​%, then

cyclical unemployment rate is 3%

labor force

employed and unemployed adults

The natural rate of unemployment includes

frictional and structural unemployment.

The 188 million difference between the adult population and the combined total of people who are employed and unemployed can be classified as

not in the civilian labor force

___ unemployment occurs when there is a poor match of​ workers' skills and abilities with available​ jobs, perhaps because workers lack appropriate training or government labor rules reduce​ firms' willingness to hire.

structural

Full employment means

there is a level of unemployment consistent with​ "normal" frictions in the labor market.

The economy of Finlandia is at full employment when

there is some unemployment due to friction in the labor​ market, but there is no cyclical unemployment.