Business Cycle and Unemployment Concepts

This set of flashcards covers key terms and concepts related to the business cycle and unemployment as discussed in the lecture notes.

Business Cycle

Fluctuations in economic activity over time, typically measured by GDP.

Unemployment Rate

The percentage of people in the labor force who are actively looking for a job but are not currently working.

Labor Force

Individuals who are above 16 years old, able and willing to work, and are not institutionalized or fully retired.

Frictional Unemployment

Temporary unemployment or being between jobs, typically involving qualified workers with transferable skills.

Structural Unemployment

Unemployment resulting from changes in the economy that make certain skills obsolete; typically involves a permanent loss of jobs.

Cyclical Unemployment

Unemployment resulting from economic downturns or recessions when demand for goods and services declines.

Natural Rate of Unemployment (NRU)

The level of unemployment that exists when the economy is healthy, including only frictional and structural unemployment.

Underemployed Workers

Individuals who are employed but wish to work more hours than they currently do.

Discouraged Workers

Individuals who have stopped looking for a job because they feel there are no opportunities available.

Full Employment Output (Y)

The Real GDP level when there is no cyclical unemployment, typically representing 4-6% unemployment.