Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key


Play button


Play button




Click to flip

68 Cards in this Set

  • Front
  • Back
Unemployment rate =
# of people unemployed
----------------------- x 100
Labor Force
Labor Force Participation Rate
Labor Force
--------------------- x 100
Working-Age Population
Working Age population
total # of people 16 years and over who are not institutionalized or in the army
(empl., unempl, NIWF)
Labor Force Participation Rate in US in 2005 was:
Unemployment Rate in US in 2005 was:
Labor Force
# of people employed
# unemployed
Unemployment during the 1960's
-fell to 3.5% due to defense production during Vietnam war
-increased consumer spending and social programs
Between 1965-1999 Women in Labor Force Increased due to:
1) More women college educated
2) Tech. change in the workplace created more white collar jobs with felxible work hours women found nice
3)Tech. change in the home increased the time available for paid employment
4)Families wanted a second income to balance tight budgets
Between 1965-2005 Men in Labor Force Decreased due to:
1) Older men retired earlier
2) Job Loss at age where finding new job is harder
3) More remained in full-time education
Sources of Unemployment
1) Job Losers
2) Job Leavers
3) Entrants or Reentrants
People who end Unemployment are:
1) Hires and Recalls
2) Withdrawls
Job Losers are:
biggest group whos # fluctuates the most
Entrants and Reentrants are:
second biggest group, # also fluctuates
Job Leavers are:
smallest group, # fluctuates the least
Frictional Unemployment ex:
ex: new grad student looking for a job
Structural Unemployment ex:
ex: telephone operators lose jobs due to computer, have to retrain to get hired again
Seasonal Unemployment ex:
ex: fruit picker laid off for winter and re-hired in spring
Cyclical Unemployment ex:
ex: auto worker laid off due to recession in economy and rehired months later
When real GDP is below Potential GDP:
The unemployment rate is above the natural rate
(1982, 1992, 2002)
Inflation Rate=
(CPI current yr - CPI previous yr)
--------------------- x 100
CPI Previous yr
Cost of CPI Basket at current period prices
--------------------- x 100
Cost of CPI basket at base period prices
Current Prices =
amount of item x current costs for item
Real Wage (Price) Rate=
Nominal Wage Rate for yr
----------------------- x 100
CPI in yr
Real Interest Rate =
Nominal Interest Rate - Inflation Rate
Inflation Rate =
Amt change in the price
from one year to next
---------------------- x 100
First yr price
Increase Population that is working age =
HIGHER unemployment rate
MODEST restructuring
LOWER unemployment rates
HIGH restructuring
HIGH unemployment rates
HIGH Unemployment benefits=
HIGH unempl. rates
HIGH Min. wage =
HIGH Unempl. rates
Strong Labor Unions =
HIGH Unempl. rates
Weak Labor Unions =
Low Unempl. rates
HIGH Labor Force =
greater level of potential GDP, lower wage rate, lower natural unemployment rate
-Work more than 1 hr. paid
-Work more than 15 hrs. unpaid in family biz
- temporarily away
- Not employed
- available for work
- looked for job in past 4 weeks
- awaiting recall to job
Not In Work Force (NIWF)
Not employed or Unemployed
ex: student, retired
Employment Rate =
Working age population
Frictional Unemployment
-labor force changing
- arises from normal labor turnover
Structural Unemployment
- economy changes
- change in tech. or international competition change skills or location of job
Seasonal Unemployment
- arises from seasonal weather patterns
Structural and
Cyclical usually go together
Cyclical Unemployment
- refers to business cycle
- increases during recession and decreases during expansion
"Full Employment" =
No cyclical unemployment
"Natural Unemployment" =
Economy at "Potential GDP"
To keep unemployment steady
need to expand at 2% growth
Current Unemployment Rate =
Why is Unemployment what it is?
1) Job Search
2) Demographics
3) Unemployment Benefits
4) Structural Change
Job Rationing
- wage floor holds constant and more people want to work than jobs available
1) Min. Wage
2)Union Wage
3) Efficiency Wage
Gas Prices
Are inflation cuz they cause other prices to go up as well
CPI Weights
-housing is most
-Transportation second
Current CPI
Real Price =
Nominal Price of (yr.)
--------------------- x 100
CPI of (yr.)
Previous Price in Current Year $$$ =
Nominal Price x (CPI Now)
(CPI Then)
Real =
nominal - inflation
GDP Deflator
covers whole economy
Boskin Commission
CPI overstates it by 1.1%
CPI doesn't consider
-quality changes
- New Goods come along
- driven by prices
Real =
nominal - inflation
GDP Deflator
covers whole economy
Boskin Commission
CPI overstates it by 1.1%
CPI doesn't consider
-quality changes
- New Goods come along
- driven by prices
someone who has been unemployed and stops looking for a job
someone who has been unemployed and starts a new job
someone who is temporarily laid off and started work again
someone who has just left school and is looking for a job
Job Leaver
voluntarily quits a job
Job Loser
fired from job permanantely or temporarily
previously had a job, quit and left labor force, and is now looking for a job again