AP Macroeconomics / Unit 2: Economic Indicators and the Business Cycle
2.3 Unemployment
Notes
Unemployment rate $\displaystyle =\frac{\text{unemployed}}{\text{labor force}}\times100$.
- Frictional (between jobs), structural (skills mismatch), cyclical (recessions).
- Natural rate = frictional + structural. Discouraged workers aren't in the labor force.
Practice
Labor force 200, unemployed 10. The unemployment rate:
$\displaystyle \frac{10}{200}$.
A worker replaced by automation and lacking new skills is:
Skills mismatch.
The natural rate of unemployment includes:
No cyclical at full employment.
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