Key Terms - Ct1 3.3, 3.4

• • Unemployment: The situation where individuals who are capable and willing to work cannot find jobs.
• • Unemployment Rate: A measure of the percentage of the labor force that is unemployed, calculated as: Unemployment Rate=(Number of UnemployedLabor Force)×100Unemployment Rate=(Labor ForceNumber of Unemployed​)×100
• • Labor Force: The total number of people who are either employed or actively seeking employment.
• • Frictional Unemployment: Short-term unemployment that occurs when individuals are temporarily between jobs or entering the labor market for the first time
• • Structural Unemployment: Long-term unemployment that arises from changes in the economy, such as technological advancements or shifts in industries, leading to a mismatch between workers' skills and job requirements.
• • Cyclical Unemployment: Unemployment that correlates with the business cycle, increasing during economic downturns and decreasing during periods of economic growth.
• • Natural Rate of Unemployment: The level of unemployment that exists when the economy is at full employment, consisting of frictional and structural unemployment but not cyclical unemployment.
• • Full Employment: A situation in which all individuals who are willing and able to work can find employment, typically associated with a low unemployment rate.
• • Job Creation: The process of generating new employment opportunities, often through government policies, business investments, or economic growth.
• • Active Labor Market Policies (ALMPs): Government programs designed to improve the functioning of the labor market, including job training, employment services, and incentives for hiring.
• • Minimum Wage Laws: Legislation that sets the lowest hourly wage that employers can pay their workers, aimed at ensuring a basic standard of living for employees.
• • Social Safety Nets: Government programs that provide financial assistance and support to unemployed individuals, such as unemployment benefits and welfare programs.
• Human Capital -  the economic value of a worker's experience and skills.
• • Inequality: The unequal distribution of resources, opportunities, or wealth among individuals or groups within a society.
• • Poverty: A state in which individuals or families lack sufficient financial resources to meet basic needs such as food, shelter, and clothing.
• • Equity: A normative concept referring to fairness in the distribution of resources and opportunities, often aimed at reducing the gap between the rich and the poor.
• • Minimum Wage Laws: Regulations that establish the lowest amount an employer can pay workers, aimed at ensuring a basic standard of living.
• • Antitrust Laws: Laws designed to prevent monopolies and promote competition, ensuring fair prices and quality products for consumers
• • Environmental Protection Laws: Regulations aimed at preventing environmental degradation and protecting communities, particularly poorer ones, from pollution and harm.
• • Subsidies: Financial assistance provided by the government to support specific industries or reduce the cost of essential goods and services.
• • Tariffs: Taxes imposed on imported goods to make them more expensive than domestic products, protecting local industries.
• • Quotas: Limits on the quantity of goods that can be imported, aimed at protecting domestic industries from foreign competition.
• • Progressive Taxation: A tax system where higher income earners pay a larger percentage of their income in taxes, aimed at reducing income inequality.
• • Welfare Payments: Financial assistance provided to individuals or families in need, including unemployment benefits and social security.
• • Indirect Taxation: Taxes that are not directly levied on income but are included in the price of goods and services, used to fund public services.
• • Maximum Prices: Price controls set by the government to prevent essential goods from becoming too expensive.
• • Minimum Prices: Price controls that establish a floor on wages to ensure workers earn a living wage.
• • Public Goods: Goods that are non-excludable and non-rivalrous, meaning they benefit everyone and one person's use does not diminish another's (e.g., roads, national defense).
• • Merit Goods: Goods that are beneficial to society but may be under-consumed if left to the free market (e.g., education,
• Lorenz Curve: A graphical representation of income distribution that illustrates the degree of inequality within a population.
• • Gini Coefficient: A numerical measure of income inequality derived from the Lorenz curve, ranging from 0 (perfect equality) to 1 (perfect inequality).
• • Universal Basic Income (UBI): A social welfare program in which all citizens receive a regular, unconditional sum of money from the government, regardless of their income or employment status.