3.3 unemployment and inflation

Question 1

unemployed

Answer 1

Workers who are of working age that are actively seeking work but unable to find a job

Question 2

underemployment

Answer 2

Workers being employed in jobs that do not fully utilize their skills/qualifications, or workers who are willing to work full-time being only able to find part-time work

Question 3

labour force

Answer 3

Employed + Unemployed, Population

Question 4

inflation

Answer 4

Sustained increase in general price levels

Question 5

deflation

Answer 5

Sustained decrease in general price levels

Question 6

disinflation

Answer 6

Fall in the rate of inflation (general price levels can still berising)

Question 7

consumer price index (CPI)

Answer 7

Measure of the cost of living of the average household by tracking the prices of a fixed basket of goods and services commonly bought by households The change in CPI from one period to another can be used to calculate the change in the inflation rate; positive rate of change is inflation; negative rate of change is deflation

Question 8

Core rate of inflation

Answer 8

CPI excluding volatile items such as food and energy, as they could distort the rate of inflation with sudden, short term changes price

Question 9

producer price index (PPI)

Answer 9

Several indices of prices received by producers at various stages of the production process; can serve as predictor of changes in the CPI as they track the prices of factor inputs