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increase transaction cost from inflation
- real cost of changing a
- listed price.
- inflation makes money a less reliable unit of
nominal interest rate
interest rate expressed in dollar terms.
real interest rate
- nominal interest rate minus the rate of
process of bringing the inflation rate down.
income divided by the price level
wage rate divided by the price level.
The natural rate of
- normal unemployment rate around which the
- actual unemployment rate fluctuates
- deviation in the actual rate of unemployment
- from the natural rate
incentive for better performance.
Side effects of government
- help workers who lose their jobs
more people seeking jobs in a labor market than there are jobs available
- unemployment due to the time workers spend in
- job search
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