CHAP 22 Flashcards
(27 cards)
Employed
1- 16 years or older
2- works at least one hour paid or 15 hours unpaid or temporary;y absent without pay
Unemployed
-16 years or older
-available for work
-made effort to find work (in previous 4 weeks)
Labor force
Employed + unemployed
Population
Labor force + not in labor force
Unemployment rate
(Unemployed)/( employed +unemployed)
Labor force participation rate
(Labor force)/(pop of 16 and abov)
Discouraged Worker effect
Discouraged and cant find job
Diff types of unemployment
Frictional (short term) structurl and cyclical
Frictional
Job skill matching issues (salary proximity) or stuck between jobs
Structural unemployment
Longer term change in economy structures skills become obsolete
Cyclical
1During recessions (low demand) 2firms lay off employers and 3needs gov intervention
CPI
Consumer price index
CPI def
Price computed to buy typical market basket
CPI eq
(Cost of basket in year X)/(Cost of basket in year base) *100 so PyQbase/PbaseQbase
Inflation rate
InflationRate=
CPIinPreviousYear
CPIinCurrentYear−CPIinPreviousYear
×100
PPI
Producer price index
PPI def
prices producers receive products in all stages (cruse, intermediate) so manufacturing level
Inflation
Overall price leve including wagesl rises
Real income
Money income/ price level (should be equal so that RI cte)
Inflation changes what
Wealth distribution between lenders and borrowers
Real interest rate
Nominal interest rate-inflation
If real interest rate>0
Lender benefits
If real interest rate <0
Leader loses
Deflation who benefits
Borrower not lender (not good)
