Macro Unit 3&4 recit

Unemployment Rate

• Ratio of the Labor force to the working-age population

• Ratio of the number of unemployed to the number in the labor force

• Ratio of the number of the unemployed to the working-age population

What are the flows of workers?

_____ and _______

Answer explanation

High in expansion and Low in recession

During Low Unemployment, losing a job increases and finding a job decreases

• True

• False

It means leaving their jobs for what the workers perceive as a better alternative

Consists of the employed and unemployed

It the the changes in employment levels due to job destruction

It is dependent on the labor-market and can be set unilaterally by firms

Workers are paid with wages that exceeds their reservation wage

• True

• False

What are the 2 Factors that affect the workers' bargaining power?

• How hard would it be for the firm to replace him

• How hard it would be for him to find another job

• How costly would it be for the firm to replace him

• How costly would it be for him to find another job