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.