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Mankiw Chapter 28
Unemployment
18
Economics
11th Grade
09/14/2008

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Term
Natural Rate of Unemployment
Definition
the amount of unemployment that the economy normally experiences
Term
Cyclical Unemployment
Definition
year to year fluctuations of unemployment around its natural rate. (associated with short term economic fluctuations).
Term
Employed
Definition
paid employees, those who own their own business, people who have jobs but are on leave, and unpaid workers in a family business.
Term
Unemployed
Definition
those who are not employed, available for work, or tried to find employment during the past four weeks. It also includes people waiting for recall from being fired.
Term
Not in the labor force
Definition
students, homemakers, or retirees. Essentially those without jobs who do not want them.
Term
Labor Force
Definition
Number of employed + number of unemployed
Term
Unemployment rate
Definition
# unemployed/labor force x 100
Term
Labor Force Participation Rate
Definition
Labor force/adult population x 100
Term
discouraged workers
Definition
individuals who would like to work but have given up looking for a job.
Term
Frictional unemployment
Definition
unemployment that results because it takes time for workers to search for the job that best suits their tastes and skills
Term
structural unemployment
Definition
unemployment that results because the number of jobs available in some labor markets is insufficient to provide jobs for everyone who wants one.
Term
sectoral shifts
Definition
changes in the composition of demand among industries or regions
Term
Unemployment insurance
Definition
A government program that partially protects workers' incomes when they become unemployed. It usually covers on average 50% of former wage for 26 weeks.
Term
Union
Definition
a worker association that bargains with employers over wages, benefits, and working conditions.
Term
collective bargaining
Definition
the process by which unions and firms agree on the terms of employment
Term
Strike
Definition
the organized withdrawal from labor by a union
Term
Efficiency wages
Definition
above-equilibrium wages paid by firms to increase worker productivity.
Term
Reasons for efficiency wages
Definition
1. worker health
2. worker turnover
3. worker quality
4. worker effort
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