Eco Chapter 7 Unemployment and Inflation

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  1. What are the real costs of unemployment?
    Lost income for labor suppliers, lost output, coupled with economic and psychological costs of unemployment on the individual and the family. :(
  2. civilian non institutional adult population
    consists of all civilians 16 years of age and older, except those in prison, in mental hospitals, or in homes for the aged; excludes military.
  3. labor force
    Those 16 years of age and older who are either working or looking for work
  4. unemployment rate
    The number of unemployed as a percentage of the labor force
  5. discouraged workers
    Those who drop out of the labor force in frustration because they can't find work
  6. labor force participation rate
    The labor force as a percentage of the adult population
  7. unemployment rate formula
    number unemployed / number in labor force
  8. Labor force participation rate formula
    Number in labor force/ number in civilian non institutional adult population
  9. long-term unemployed
    Those looking for work 27 weeks or longer
  10. frictional unemployment
    Unemployment that occurs because job seekers and employers need time to find each other; Frictional unemployment does not usually last long and results in a better match between workers and jobs, so the entire economy works more efficiently
  11. Seasonal unemployment
    Unemployment caused by seasonal changes in the demand for certain kinds of labor
  12. Structural unemployment
    Unemployment because (1) the skills demanded by employers do not match those of the unemployed, or (2) the unemployed do not live where the jobs are ; Policy makers and economists are very much concerned with this type of unemployment
  13. cyclical unemployment
    Unemployment that fluctuates with the business cycle, increasing during recessions and decreasing during expansions ; Government policies that stimulate aggregate demand aim to reduce cyclical unemployment
  14. full employment
    Employment level when there is no cyclical unemployment, not 0% rather 4-6% unemployment is considered full employment
  15. Underemployed
    Workers are overqualified for their jobs or work fewer hours than they would prefer
  16. hyperinflation
    A very high rate of inflation
  17. deflation
    A sustained decrease in the price level
  18. disinflation
    A reduction in the rate of inflation
  19. demand-pull inflation
    A sustained rise in the price level caused by a rightward shift of the aggregate demand curve
  20. cost-push inflation
    A sustained rise in the price level caused by a leftward shift of the aggregate supply curve
  21. interest
    The dollar amount paid by borrowers to lenders
  22. interest rate
    Interest per year as a percentage of the amount loaned
  23. nominal interest rate
    The interest rate expressed in dollars of current value (that is, not adjusted for inflation) as a percentage of the amount loaned; the interest specified on the loan aggrement
  24. real interest rate
    The interest rate expressed in dollars of constant purchasing power as a percentage of the amount loaned; the nominal interest rate minus inflation rate
  25. COLA
    cost-of-living adjustment; an increase in a transfer payment or wage that is tied to increase in the price level.
  26. Real interest rate formula
    Nominal interest rate - Inflation rate
  27. Which is group is lowest/highest in unemployment rate?
    Lowest: white adults, highest black teenagers
  28. Causes of Structural unemployment?
    weather/seasons on certain industries such as construction, agriculture and tourism
  29. What arises causing structural unemployment?
    Changes in tastes, technology, taxes and competition all reduce the demand for certain skills and increase the demand for other skills.
Card Set:
Eco Chapter 7 Unemployment and Inflation
2014-10-16 18:40:07
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