Test 2 AP Macro - Employment, Unemployment

Employed

Job - makes money

Unemployed

No job

Civilian, non-institutional adult population

Refers to individuals aged 16 and older who are not part of any institutional settings, such as prisons or mental hospitals.

Civilian labor force

The subset of Americans who have jobs or are seeking a job, are at least 16 years old, are not serving in the military and are not institutionalized 

Labor force participation rate

Measures the percentage of the working-age population that is either employed or actively seeking employment, providing insight into the economy’s active workforce.

Labor force participation rate equation

LFPR = (labor force) / (civilian noninstitutional population) x 100

Frictional Unemployment

The temporary unemployment that occurs when individuals are in between jobs or are actively seeking new employment.

Structural Unemployment

A long-lasting form of unemployment that arises from mismatches between the skills of workers and the needs of employers due to shifts in the economy. Can occur due to changes in technology

Cyclical unemployment

Occurs due to fluctuations in the economic cycle. Rises during recessions when demand for goods and services decrease, leading to layoffs, and falls during periods of economic expansion.

Natural rate of unemployment

The level of unemployment that exists in an economy when it is at full employment, meaning that all those willing to work at prevailing wage rates are employed.

• Includes frictional and structural unemployment

• Excludes cyclical unemployment

Actual rate of unemployment

The percentage of the labor force that is jobless and actively seeking employment