AP®︎ Macroeconomics: Topic 2.3 Flashcards

Master key terms and definitions for Topic 2.3 of AP Macroeconomics – Unemployment to help you prep for quizzes and the AP exam.

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Term

Labor Force

Definition

People age 16 and over who are employed or actively seeking work.

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Labor Force
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People age 16 and over who are employed or actively seeking work.

MEA-1.C
Unemployment Rate
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The percentage of the labor force that is unemployed and actively looking for work.

MEA-1.CMEA-1.C.1
Labor Force Participation Rate
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The percentage of the adult population that is in the labor force.

MEA-1.CMEA-1.C.2
Calculating Unemployment Rate and Labor Force Participation Rate
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Unemployment rate = unemployed ÷ labor force × 100; participation rate = labor force ÷ adult population × 100.

MEA-1.C
Discouraged Workers
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People who want jobs but stopped looking, so they are not counted in the labor force.

MEA-1.DMEA-1.D.1
Limitations of the Unemployment Rate
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It can understate joblessness by excluding discouraged workers and some involuntary part-time workers.

MEA-1.DMEA-1.D.1
Types of Unemployment
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Frictional: between jobs; structural: skills mismatch; cyclical: recession-caused decline in labor demand.

MEA-1.EMEA-1.E.1
Cyclical Unemployment and the Natural Rate
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Cyclical unemployment equals actual unemployment minus the natural rate during recessions or booms.

MEA-1.EMEA-1.E.3
Changes in the Natural Rate of Unemployment
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It can change over time because labor force characteristics and job-matching conditions change.

MEA-1.EMEA-1.E.4
Natural Rate of Unemployment and Full Employment
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The jobless rate at full employment, when only frictional and structural unemployment exist.

MEA-1.EMEA-1.E.2