ECO ch 14

• number of people employed plus unemployed
• (LF=E+U)

• number of people unemployed as a percentage of the LF
• unemployment rate = U/LF

portion of unemployment that is due to normal working of the labor market, used to denote short-run job/skill matching problems

portion of unemployment that is due to changes in the structure of the economy that result in significant loss of jobs in certain industries

The increase in unemployment that occurs during recessions and depressions

Graph that illustrates the amount of labor that firms want to employ at each given wage rate

The downward rigidity of wages as an explanation for the existence of unemployment.