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Unemployed...
And the Folks are Over-Joyed
33
Economics
Undergraduate 1
03/14/2012

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Term
Employed
Definition
People who work: includes both full time and part time workers or people temporally absent from job.
Term
Natural rate of unemployment
Definition
Normal rate of unemployment
Around which the unemployment rate fluctuates
more straightish
Term
Cyclical unemployment
Definition
Deviation of unemployment from its natural rate
Term
Frictional unemployment
Definition
Results because it takes time for workers to search for the jobs that best suit their tastes and skills.
Term
Structural unemployment
Definition
Results because the number of jobs available in some labor markets is insufficient to provide a job for everyone who wants one
Term
Why some frictional unemployment is inevitable
Definition
Changes in demand for labor among different firms
Changes in composition of demand among industries or regions (sectoral shifts)
Term
Unemployment insurance
Definition
Government program
Partially protects workers’ incomes when they become unemployed
Increases frictional unemployment without intending to do so
Term
Minimum-wage laws
Definition
Forces the wage to remain above the equilibrium level
Term
Union
Definition
raises the wage above the equilibrium level
Term
Explicit agreement among members of a cartel
Definition
To raise prices is normally considered illegal
Is called conspiracy in restraint of trade
Term
Unionization of workers
Definition
Is backed by antitrust laws of NLRB
Enables them obtain the power they need to bargain with employers
Term
Membership in Unions
Definition
Can be voluntary
Be imposed on employers during collective bargaining
Term
Union Critic
Definition
High union wages reduce employment in unionized firms below the efficient level
Europe’s unemployment rate is increasing steadily due to rigidities in Europe’s labor market, especially so for members of the EU. This includes high degrees of unionization
Some workers benefit at the expense of other workers
Term
Advocates of Uninos
Definition
- pay lower wages and offer worse working conditions
help firms respond efficiently to workers’ concerns
Keep a happy and productive workforce
Term
Efficiency wages
Definition
Above-equilibrium wages paid by firms to increase worker productivity
Term
Worker health
Definition
Better paid workers
Eat a more nutritious diet
Healthier and more productive
Term
Worker quality
Definition
Firm – pays a high wage
Attracts a better pool of workers
Increases the quality of its workforce
Term
Worker effort
Definition
High wages – make workers more eager to keep their jobs
Give workers an incentive to put forward their best effort
Term
Money
Definition
Set of assets in an economy that people regularly use to buy goods and services from other people
Term
The functions of money
Definition
Medium of exchange
Unit of account
Store of value
Term
Medium of exchange
Definition
Item that buyers give to sellers when they want to purchase goods and services
Term
Unit of account
Definition
The asset must be divisible
Term
Store of value
Definition
The asset must be stable in value
Term
Demand deposits
Definition
Balances in bank accounts
Depositors can access on demand by writing a check
Term
m1
Definition
demand deposit, traveler check, currency
Term
Federal Reserve (Fed)
Definition
Oversee the banking system and regulate the quantity of money in the economy
Term
FOMC
Definition
Federal Open Market Committee
Term
To increase the money supply
Definition
The Fed buys U.S. government bonds
Term
An increase in reserve requirement
Definition
Decrease the money supply
Term
Higher discount rate
Definition
Reduce the money supply
Term
Bank Run
Definition
everyone runs to get money
Term
fedearl funds rate
Definition
interest rate at which banmks make overnight loans to eachother
Term
A change in federal funds rate
Definition
Changes other interest rates
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