Conceptos Macroeconomia

I. Concepts and Definitions

A. Define each of the following concepts/terms and explain how they are measure:
Labor Force
In macroeconomic statistics, the labor force is the sum of all employed and unemployed adults. The Bureau of Labor Statistics estimates the approximate size of the labor force regularly. Each individual age 16 or above is categorized as being employed,unemployed, or not in the labor force, according to current and recent guidelines. The most common reasons for a non-child to be classified not in the labor forces are to be retired, a student, or institutionalized. The size of the labor force changes over time. Labor force fluctuations occur due to a combination of demographic, social, and seasonal trends as well as macroeconomic conditions. Ingeneral, the majority of the population is part of the labor force. The labor force changes and estimates are made by the Bureau of Labor Statistics using regularly surveys
Productivity
Productivity is commonly defined as a ratio between the output volume and the volume of inputs. In other words, it measures how efficiently production inputs, such as labour andcapital, are being used in an economy to produce a given level of output. Productivity is considered a key source of economic growth and competitiveness and, as such, is basic statistical information for many international comparisons and country performance assessments. For example, productivity data are used to investigate the impact of product and labour market regulations on economicperformance. Productivity growth constitutes an important element for modeling the productive capacity of economies. It also allows analysts to determine capacity utilization, which in turn allows one to gauge the position of economies in the business cycle and to forecast economic growth. In addition, production capacity is used to assess demand and inflationary pressures.
There are different measures ofproductivity and the choice between them depends either on the purpose of the productivity measurement and/or data availability. One of the most widely used measures of productivity is Gross Domestic Product (GDP) per hour worked. This measure captures the use of labour inputs better than just output per employee. Generally, the default source for total hours worked is the OECD Annual NationalAccounts database, though for a number of countries other sources have to be used. Despite the progress and efforts in this area, the measurement of hours worked still suffers from a number of statistical problems. Namely, different concepts and basic statistical sources are used across countries, which can hinder international comparability. In principle, the measurement of labour inputs should alsotake into account differences in workers’ educational attainment, skills and experience. Accordingly, the OECD has started to develop adjusted labour input measures.
Full employment
A society is almost never fully employed, but one of the goals is to reach full employment. Full employment has two conditions: Everyone who wants to work is working, and the rate of inflation is stable. Whenthe economy is at full employment, there is no cyclical unemployment but still frictional and structural unemployment. Keynes states that any state of affairs characterized by the absence of involuntary unemployment shall be described as full employment. He claims that full employment exists whenever employment is inelastic in response to an increase in the effective demand for its output.John Maynard Keynes had breakthrough ideas about the business cycle in macroeconomics. He formulated the equation for an economy at full employment equilibrium:
GDP = C + Inv + G + (eX - I)
GDP is the gross domestic product, C is consumer expenditures, Inv is total investment, G is government spending and (eX - I) is exports minus imports.
Output Gap
The output gap is a measure of the...