Macroeconomics Ch. 5 Monitoring Jobs & Inflation – Flashcards
Unlock all answers in this set
Unlock answersquestion
Working Age Population
answer
the total number of people aged 16 years and over who are not in jail, hospital, or some other form of institutional care
question
Labor Force
answer
the sum of the employed and the unemployed Number of people employed + number of people unemployed
question
Conditions to be considered Unemployed
answer
1. Without work but has made specific efforts to find a job within the previous four weeks 2. Waiting to be called back to a job from which he or she has been laid off 3. Waiting to start a new job within 30 days
question
Not in the Labor Force
answer
people in the working age population who are neither employed or unemployed
question
Unemployment Rate
answer
The percentage of the people in the labor force who are unemployed Unemployment rate = Number of people unemployed divided by labor force multiplied by 100 and
question
Employment to Population Ratio
answer
Number of people employed divided by working age population multiplied by 100
question
Labor Force Participation Rate
answer
labor force divided by working age population multiplied by 100
question
Marginally Attached Worker
answer
A person who currently is neither working nor looking for work but has indicated that he or she wants and is available for a job and has looked for work sometime in the recent past
question
Discouraged Worker
answer
A marginally attached worker who has stopped looking for a job because of repeated failure to find one
question
Frictional Unemployment
answer
the unemployment that arises from the normal labor turnover of people entering and leaving the labor force and from ongoing creation and destruction of jobs
question
Cyclical Unemployment
answer
the higher than normal unemployment at a business cycle trough and the lower than normal unemployment at a business cycle peak
question
Structural Unemployment
answer
the unemployment that arises when changes in technology or international competition change the skills needed to perform jobs or change the locations of jobs
question
Natural Unemployment Rate
answer
unemployment that arises when all unemployment is frictional and structural; when there is no cyclical unemployment
question
Full Employment
answer
a situation in which the unemployment rate equals the natural unemployment rate
question
Factors that influence the natural unemployment rate
answer
1. the age distribution of the population 2. the scale of structural change 3. the real wage rate 4. unemployment benefits
question
Output gap
answer
the gap between real GDP and potential GDP
question
Price Level
answer
average level of prices
question
Inflation
answer
persistently rising price level
question
Deflation
answer
persistently falling price level
question
Hyperinflation
answer
inflation rate of 50% a month or higher that grinds the economy to a halt and causes a society to collapse
question
Consumer Price Index (CPI)
answer
a measure of the average of the prices paid by urban consumers for a fixed basket of consumer goods and services
question
CPI Formula
answer
Cost of CPI basket at current prices divided by cost of CPI basket at base-period prices multiplied by 100
question
Core inflation rate
answer
a measure of the inflation rate that excludes volatile prices in an attempt to reveal the underlying inflation trend
