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Glossary

  1. Natural Rate of Unemployment: Abbreviated NRU; Frictional and structural unemployment are regarded as always being inevitable in an economy. To economists, full employment in the United State has been considered 4-5% unemployment.
  2. Cyclical Unemployment: Unemployment that is tied to changes in the business cycle.
  3. Frictional Unemployment: Unemployment caused by workers who are searching for a job after leaving another.
  4. Structural Unemployment: Unemployment caused by a worker's skills no longer being needed. Persons who lose their jobs due to outsourcing tasks abroad are considered structurally unemployed.
  5. Labor Force: People who are working or are out of a job, but who are actively looking for work.
  6. Part-time Worker: A person who works between 1-34 hours a week is regarded as being employed and in the Labor Force.
  7. Discouraged Worker: Persons who are no longer seeking work. They are no longer in the labor force and are not considered unemployed.
  8. Unemployment Rate: The total number of unemployed in the labor force.
  9. Seasonal Unemployment: A form of structural unemployment in which a worker's job is tied to changes in seasons.
  10. Bureau of Labor Statistics (BLS): The U.S. agency responsible for calculating the unemployment rate.
  11. Expenditure Model:

    Return, for a moment, back to the expenditure model you learned earlier: GDP = C + I + G +/- Xn (a stable economy)

    In the case of slow growth in GDP, unemployment, recession, or depression, there is too much supply and not enough demand. The spenders (C, I, G, Xn) are not buying the GDP. These total spenders (aggregate demand) are less than the total output (aggregate supply).

    Thus the formula for slow growth in GDP, unemployment, recession, and depression can be rewritten as follows:

    GDP output > (is greater than) C + I + G +/- Xn.