AP Macroeconomics Module 12 - The Meaning and Calculation of Unemployment

Unemployment Rate (extra note)

- The unemployment rate will never drop to 0 -The ups and downs of the unemployment rate mostly reflect economic changes that have a significant impact on peoples lives

How to calculate labor force participation rate

Labor Force/Population Age 16 or older x 100

How to calculate unemployment rate

Number of unemployed workers/Labor Force x 100

Discouraged Workers

Individuals who want to work but aren't currently searching for a job

Employed

People currently holding a job in the economy

Unemployed

People who are actively looking for work but aren't currently employed

Marginally Attached Workers

Same as discouraged workers, only difference is they would actually like to have a job

Underemployed

Workers who would like to find full time jobs, but are currently working part-time jobs

Labor Force Participation Rate

The percentage of the population age 16 or older, that is in the labor force

Unemployment Rate

The percentage of the total number of people in the labor force who are unemployed

Labor Force

The sum of the unemployed and the employed

Significance of the unemployment rate

The unemployment rate is a good indicator of easy or difficult it is to find a job given the current state of the economy