ECON 200 CH 20

What has been the average unemployment rate in the United States since 1970?

6%

An economic downturn can lead mainly to which type of unemployment?

Cyclical (not natural unemployment)

Which type of unemployment can be negative?

Cyclical Unemployment

If a large group of US workers begins to retire what will be its effect on labor force?

Decreased labor force, decreased unemployed

What are shortcomings of the official unemployment rate?

Discouraged workers are not included as part of the labor force and underemployed workers are also not included in the labor force.

What is the root cause of cyclical unemployment?

Economic Downturn

What is natural unemployment?

Frictional and structural unemployment

What types of unemployment exists during healthy economic periods?

Frictional and structural unemployment

What are the three types of unemployment?

Frictional- caused by time delays in getting available jobs Cyclical- caused by economic downturn Structural- changes in industrial makeup of economy (Blockbuster → Netflix)

During healthy economic periods, what happens to cyclical unemployment?

It goes away (DOES NOT OCCUR IN HEALTHY TIMES)

What makes up the sum of the number of unemployed and number of employed people?

Labor Force

What does "officially unemployed" mean?

Looking for a job and qualified to be employed and have been searching for the last 4 weeks.

During a recession, fewer individuals fly across the country for vacations. As a result, many pilots and flight attendants lose their jobs. How would these individuals be classified as?

Mentioned recession! (Negative) This means it's cyclical

Thomas is not working but has given up searching for a job because he believes there are no jobs available for him. Will he be considered part of the labor force?

No

What is the equation for the labor force participation rate?

Number in labor force / total adult population x 100

Jade has stopped looking for a job because she feels there are no jobs available for her. Will she be considered officially unemployed?

She is not in the labor force (discouraged)

Which types of unemployment occur even when the economy is healthy and growing?

Structural and frictional (both considered natural unemployment)

Marcus was an aircraft mechanic for 27 years. An advancement in technology automated his job, so Marcus lost his job. A person who loses his or her job this way would be considered ___________ unemployed.

Structurally

What is the relationship between actual unemployment rate and natural rate of unemployment if the economy is in a very expansionary phase?

The natural rate of unemployment is greater than the rate of unemployment as a whole.

Since 1950, what has happened to the percentage of women participating in labor force?

The percentage of women in the labor force has increased drastically.

What misconceptions do people have about unemployment?

They don't take into consideration those that are under employed or discouraged

All three types of unemployment are difficult on households. True or False?

True

Which is the main statistic used to monitor unemployment in the economy?

Unemployment Rate- (that's the actual title)

What is the natural rate of unemployment?

Unemployment that happens due to a growing economy (not cyclical)

Give an example of a case when the unemployment rate is equal to the natural rate.

When cyclical unemployment is at zero then the economy is healthy.

Aileen is a full-time student working part-time. Will she be considered part of the labor force?

Yes

Kimberly has retired from the military and now works at the post office. Will she be considered part of the labor force?

Yes

Janice just graduated from college and is searching for a job that fits her graphic-design skills. Will she be considered officially unemployed?

Yes, it is frictional unemployment. (bc she wants to use her degree)