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ECON 203 Exam 2 Detailed Questions And Expert Answers 2024
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ECON 203 Exam 2 Detailed Questions And Expert Answers 2024
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ECON 203 Exam 2 Detailed Questions AndExpert Answers 2024
The main source of information on unemployment in the US is a household survey
called the...
-Current Population Survey, conducted by the US Census Bureau and Bureau of
Labor Statistic
-Collected year around; seasonally adjusted
Working age population
Total Population - Young, Military, and Institutionalized
Working Age Population
labor force + not in labor force
Labor Force
employed + unemployed
Employed
Everyone currently working, including part-time workers and temporary absentees
BLS defines unemployment as people who...
-Persons aged 16 years and older who had no employment during the reference
week
-Were available for work
-Had made specific efforts to find employment sometime during the 4-week period
ending with the reference week
(are NOT counted in labor force)
Not in the Labor Force
,-homemakers
-full-time students
-retirees who choose or cannot work
-those who cannot work due to disability
-those who choose not to work
Unemployment Rate
Number of unemployed/labor force X 100
Labor Force Participation Rate
(Labor Force/Working age pop.) X 100
Marginally Attached Workers
Persons not in the labor force who want and are available for jobs, and who have
looked for a job in the prior 12 months, but not in the 4 weeks preceding the
survey. (not counted in labor force)
Discouraged Workers
Marginally attached workers who are not currently looking for a job, because they
believe there are no jobs available or there are none for which they qualify
limitations of unemployment rate
does not give good indication of how many people are discouraged,
underemployed. marginally attached
Underemployed Workers
People who are either working less than they would like or in jobs below their skill
level
Equilibrium in the labor market occurs:
at the wage level where workers provide the same level of labor as firms are
willing to hire (no unemployment)
,Unemployment occurs:
when the wage rate is higher than the equilibrium rate
natural rate of unemployment
normal level of unemployment that persists in an economy in the long run
frictional unemployment
Caused by workers who are changing locations, jobs, or careers
structural unemployment
caused by a mismatch between the skills workers can offer and the skills in
demand
Real-wage or classical unemployment
results from wages being higher than the market-clearing level
Efficiency wages
wages that employers set above the equilibrium wage rate as an incentive for
better employee performance
Classical unemployment
, wage is higher than equilibrium wage
cyclical unemployment
Fluctuations from natural unemployment
Sticky Wages
-Wages that are slow to respond to shifts in the economy
Factors that affect unemployment:
Government policies, job search technologies, minimum wage laws,
unemployment insurance, taxes and worker rights, professional training programs,
gov. run employment agencies
Impact of minimum wage on the labor market
if MW is set above equilibrium wage the quantity of labor supplied is higher than
quantity of labor demanded, resulting in unemployment
unemployment insurance
money paid by the government to people who are unemployed.
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