Principles of Macroeconomics: Chapter 8 - Unemployment

This set of flashcards covers key vocabulary and concepts related to unemployment from the lecture notes on macroeconomics.

Unemployment Rate

The percentage of adults in the labor force who are seeking jobs but do not have any.

Labor Force

The total number of employed and unemployed individuals actively seeking work.

Employed

Individuals who are currently working for pay.

Unemployed

Individuals who are out of work and actively looking for a job.

Hidden Unemployment

Individuals mislabeled in the categories of employed, unemployed, or out of the labor force.

Underemployed

Individuals employed in jobs that are below their skill level.

Discouraged Workers

Individuals who have stopped looking for employment due to the lack of suitable positions.

Labor Force Participation Rate

The percentage of adults in an economy who are employed or unemployed and looking for a job.

Cyclical Unemployment

Unemployment closely tied to the business cycle, increasing during recessions.

Frictional Unemployment

Unemployment that occurs when workers are in between jobs.

Structural Unemployment

Unemployment that occurs when individuals lack skills that are in demand by employers.

Natural Rate of Unemployment

The rate of unemployment that would exist in a growing economy, reflecting structural and frictional unemployment.

Sticky Wages

Wage rates that do not adjust downward easily, leading to unemployment when demand for labor decreases.

Implicit Contract

An unwritten agreement in the labor market concerning wage expectations during economic fluctuations.

Efficiency Wage Theory

The theory that higher wages can lead to increased worker productivity.

International Unemployment Comparisons

The comparative analysis of unemployment rates across countries, which can vary due to different definitions and labor market structures.

Patterns of Unemployment

Changes in unemployment rates as the economy moves in and out of recessions, generally stabilizing between 4% to 6% over time.

Unemployment Rates by Group

Comparative statistics indicating differences in unemployment across various demographics, such as gender, age, and race.