Chapter 9 – Unemployment and its Natural Rate (Terms) Flashcard Example #22782

Labour Force
The total number of workers, including both the employed and unemployed
Unemployment Rate
The percentage of the labour force that is unemployed
Labour-force participation rate
The percentage of the adult population that is in the labour force
Discouraged searchers
Individuals who would like to workbut have given up looking for a job
Natural rate of unemployment
The rate of unemployment to which the economy tends to return in the long run
Cyclical unemployment
The deviation of unemployment from its natural rate
Frictional unemployment
Unemployment that results because it takes time for workers to search for the jobs that best suit their tastes and skills
Structural Unemployment
Unemployment that results because the number of jobs available in some labour markets is insufficient to provide a job for everyone who wants one
Job search
The process by which workers find appropriate jobs given their tastes and skills
Employment Insurance (EI)
A government program that partially protects workers’ incomes when they become unemployed
Sectoral Shifts
Changes in the composition of demand among industries or regions
Union
A worker association that bargains with employers over wages and working conditions
Collective bargaining
The process by which unions and firms agree on the terms
Strike
The organized withdrawal of labour from a firm by a union
Efficiency wages
Above-equilibrium wages paid by firms in order to increase worker productivity

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