Chapter 8

Question 1

Employment

Answer 1

The number of people currently employed in the economy, either full time or part time

Question 2

Unemployment

Answer 2

The number of people who are actively looking for work but arent currently employed

Question 3

Labor force

Answer 3

The sum of employment and unemployment

Question 4

Labor force participation rate

Answer 4

The percentage of the population aged 16 or older that is in the labor force

Labor force

Population age 16 and older ^{X 100}

Question 5

Unemployment rate

Answer 5

The percentage of the total number of people in the labor force who are unemployed

Number of unemployed workers

Labor force X 100

Question 6

Discouraged workers

Answer 6

Nonworking people who are capable of working but have given up looking for a job given the state of the job market

Question 7

Marginally attached workers

Answer 7

Would like to be employed and have looked for a job in the recent past but are not currently looking for work

Question 8

Underemployment

Answer 8

The number of people who work part time because they cannot find full-time jobs

Question 9

Economic expansioins arent always __________

Answer 9

Periods of falling unemployment

Although economy is growing, it is not growing fast enough to reduce the unemployment rate

Question 10

jobless recovery

Answer 10

A period in which the real GDP growth rate is positive but the unemployment rate is still rising

Question 11

Average GDP growth for US

Answer 11

3.25%

when above - unemployment falls

when below - unemployment rises

Question 12

Job search

Answer 12

Woerkers who wpend time looking for employment are engaged in a job search

Question 13

Frictional unemployment

Answer 13

Unemployment due to the time workers spend in job search

Question 14

long-term unemployed

Answer 14

unemployed for 27 or more weeks

Question 15

structural unemployment

Answer 15

More people are seeking jobs in a particular labor market than there are jobs available at the current wage rate, even when the economy i s at the peak of a business cycle

Question 16

collective bargaining

Answer 16

Intended to tip the scales of bargaining power more toward workers and away from employers

Question 17

labor strike

Answer 17

a collective refusal to work

Question 18

efficiency wages

Answer 18

wages that employers set above the equilibrium wage rate as an incentive for better employee performance

Question 19

Eurosclerosis

Answer 19

The persistent high unemployment in Europe because of generous unemployment benefits

Question 20

Natural rate of unemployment

Answer 20

The unemployment rate that arises from the effects of frictional plus structural unemployment

Frictional + Structional = Natural

Question 21

Cyclical unemployment

Answer 21

The deviation of the actual rate of unemployment from the natural state due to downturns in the business cycle.

Actual = natural + cyclical

Cyclical = Actual - Natural

Question 22

Real wage

Answer 22

wage rate

price level

Question 23

Real income

Answer 23

Income

Price level

Question 24

Inflation rate

Answer 24

Price index in year 2 - year 1

Price index year 1 X 100

Question 25

shoe-leather costs

Answer 25

The increased costs of transactions caused by inflation

Question 26

Menu cost

Answer 26

The real cost of changing a listed price

Question 27

unit-of-account costs

Answer 27

Arise from the way inflation makes money a less reliable unit of measurement

ex. pg. 231 in book

Question 28

interest rate

Answer 28

On a loan, is the price, calculated as a percentage of the amount borrowed, that a lender charges a borrower for the use of their savings for one year

Question 29

nominal interst rate

Answer 29

the interest rate expressed in dollar terms

Question 30

real interst rate

Answer 30

the nominal interest rate minus the rate of inflation