Business Cycles, Unemployment, and Inflation

Flashcards covering key terms and concepts related to unemployment, economic cycles, and related statistics.

Unemployment Rate

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

Household Survey

A survey conducted by the BLS involving around 60,000 households to calculate the unemployment rate.

Establishment Survey

A survey conducted by the BLS focusing on about 400,000 companies to gather employment data.

Labor Force Participation Rate

The percentage of the working-age population that is either employed or actively looking for work.

Frictional Unemployment

Temporary unemployment occurring when people are between jobs or entering the workforce.

Structural Unemployment

Long-term unemployment resulting from changes in the economy, like technological advancements.

Cyclical Unemployment

Unemployment correlated with the economic cycle, increasing during recessions.

Natural Rate of Unemployment (NRU)

The level of unemployment consistent with a stable economy, including frictional and structural unemployment.

GDP Gap

The difference between actual GDP and potential GDP at full employment.

Okun’s Law

States that for every 1% increase in unemployment, a country's GDP will be an additional roughly 2% lower than its potential GDP.

Discouraged Workers

Individuals who are not actively searching for work because they believe no jobs are available for them.

U-6 Unemployment Rate

A broader measure of unemployment that includes total unemployed plus all marginally attached workers and those working part-time for economic reasons.

Macroeconomic Goals

Objectives including economic growth, full employment, and price stability.

Official Unemployment Rate (U-3)

The most commonly reported unemployment rate, representing total unemployed as a percent of the labor force.

Unpaid Work

Work done without pay, often in family businesses, which can affect unemployment status.

Labor Force

The total number of people employed plus those unemployed but actively seeking work.