Econ Chapter 7 – Flashcards

Unlock all answers in this set

Unlock answers
question
Unemployment
answer
The total number of adults aged 16 or older who are willing and able to work and who are actively looking for work but have not found a job.
question
Labor Force
answer
Individuals 16 and over who either have jobs or are looking and available for jobs; the number of employed plus the number of unemployed.
question
Stock
answer
The quantity of something, measured at a given point in time-for example, an inventory of goods or a bank account. ___ are defined independently of time, although they are assessed at a point in time.
question
Flow
answer
A quantity measured per unit of time; something that occurs over time, such as the income you make per week or per year or the number of individuals who are fired every month.
question
Job Loser
answer
An individual in the labor force whose employment was involuntary terminated.
question
Reentrant
answer
An individual who used to work full time but left the labor force and has now reentered looking for a job.
question
Job Leaver
answer
An individual in the labor force who quits voluntarily.
question
New Entrant
answer
An individual who has never held a full-time job lasting 2 weeks or longer but is now seeking employment.
question
Discouraged Workers
answer
Individuals who have stopped looking for a job because they are convinced that they will not find a suitable one.
question
Labor Force Participation Rate
answer
The percentage of noninstitutionalized working-age individuals who are employed or seeking employment.
question
Frictional Unemployment
answer
Unemployment due to the fact that workers must search for appropriate job offers. This takes time, and so they remain temporarily unemployed.
question
Structural Unemplyment
answer
Unemployment resulting from a poor match of workers abilities and skills with current requirements of employers.
question
Cyclical Unemployment
answer
Unemployment resulting from business recessions that occur when total demand is insufficient to create full employment.
question
Seasonal Unemployment
answer
Unemployment resulting from the seasonal pattern of work in specific industries. It is usually due to seasonal fluctuations in demand or to changing weather conditions, rendering work difficult, if not impossible, as in agriculture and construction.
question
Full Employment
answer
An arbitrary level of unemployment that corresponds to "normal" friction in the labor market. In 1986, a 6.5 percent rate of unemployment was considered _____. Today, it is assumed to be 5% or less.
question
Natural Rate of Unemployment
answer
The _________ that is estimated to prevail in long-run macroeconomic equilibrium, when all workers and employers have fully adjusted to an economic changes.
question
Inflation
answer
The situation in which the average of all prices of goods and services in an economy is rising.
question
Deflation
answer
The situation in which the average of all prices of goods and services in an economy is falling.
question
Purchasing Power
answer
The value of money for buying goods and services. If your money income stays the same but the price of one good that you're buying goes up, your effective purchasing power falls, and vice versa.
question
Price Index
answer
The cost of today's market basket of goods expressed as a percentage of the cost of the same market basket during a base year.
question
Base Year
answer
The year that is chosen as the point of reference for comparison of prices in other years.
question
Consumer Price Index
answer
A statistical measure of a weighted average of prices of a specified set of goods and services purchased by wage earners in urban areas.
question
Producer Price Index
answer
A statistical measure of a weighted average of prices and goods and services that firms produce and sell.
question
GDP Deflator
answer
A price index measuring the changes in prices of all new goods and services produced in the economy.
question
Anticipated Inflation
answer
The inflation rate that we believe will occur; when it does, we are in a situation of fully _______.
question
Unanticipated Inflation
answer
Inflation at a rate that comes as a surprise, either higher or lower than the rate anticipated.
question
Nominal Rate of Interest
answer
The market rate of interest expressed in today's dollars.
question
Real Rate of Interest
answer
The nominal rate of interest minus the anticipated rate of inflation.
question
Cost Of Living Adjustments
answer
Clauses in contracts that allow for increased in specified nominal values to take account of changes in the cost of living.
question
Repricing
answer
Also called cost of inflation or menu; the cost associated with recalculating prices and printing new price lists when there is inflation.
question
Business Fluctuations
answer
The ups and downs in overall business activity, as evidence by changes in national income, employment, and the price level.
question
Expansion
answer
A business fluctuation during which the pace of national economic activity is slowing down.
question
Contraction
answer
A business fluctuation during which the pace of national economic activity is slowing down.
question
Recession
answer
A period of time during which the rate of growth of business activity is consistently less than its long-term trend or is negative.
question
Depression
answer
An extremely severe recession.
Get an explanation on any task
Get unstuck with the help of our AI assistant in seconds
New