Work through the list without notes. If you cannot do a statement, follow its link, then come back. Guide = study guide; Practice = practice questions.
Understanding
- I can sort any adult into employed, unemployed or not in the labor force, and explain the test for being unemployed. (Guide: “Sorting the adult population into three groups”; Practice Q1)
- I can define the labor force, the unemployment rate and the labor force participation rate, and say which denominator each rate uses. (Guide: “Sorting the adult population into three groups”; Practice Q2)
- I can define frictional, structural and cyclical unemployment and classify an example of each. (Guide: “Three types of unemployment”; Practice Q4)
- I can define the natural rate and explain why full employment does not mean zero unemployment. (Guide: “The natural rate of unemployment”; Practice Q6(c))
Calculation
- I can calculate the labor force, the unemployment rate and the participation rate from survey data. (Guide: Worked example 1; Practice Q2, Q7(a))
- I can work backwards from the two rates to the number employed and unemployed. (Practice Q5(a))
- I can calculate the natural rate and the cyclical rate, including a negative cyclical rate. (Guide: Worked example 3; Practice Q6(a)–(b))
Reasoning
- I can explain how a person moving between groups changes each rate, including why discouraged workers lower the unemployment rate. (Guide: “How changes in the labor market move the rates”; Practice Q3, Q5(b))
- I can explain why the measured rate can understate joblessness, using discouraged workers and part-time workers who want full-time work. (Guide: “Limitations of the unemployment rate”; Practice Q7)
- I can explain how a change in labor force characteristics or job-search methods changes the natural rate. (Guide: “The natural rate of unemployment”; Practice Q6(d)–(e))
All ticked? Move on to Topic 2.4, Price Indices and Inflation, or return to the course roadmap.