occurs when industries slow or shut down for a season or make seasonal shifts in their production schedules.
Seasonal unemployment
occurs when people take time to find a job
Frictional unemployment
occurs when workers’ skills do not match the jobs that are available.
Structural unemployment
5 major causes of structural unemployment:
The development of new technology. The discovery of new resources. Changes in consumer demand. Globalization Lack of education.
unemployment that rises during economic downturns and falls when the economy improves.
Cyclical unemployment
the percentage of the nation’s labor force that is unemployed.
Unemployment rate
the level of employment reached when no cyclical unemployment exists.
Full employment
working at a job for which they are over-qualified, or working part-time when they desire full-time work.
Underemployment
person who wants a job but has given up looking.
Discouraged worker
a general increase in prices.
Inflation
the ability to purchase goods and services.
Purchasing power
measurement that shows how the average price of a standard group of goods changes over time.
Price index
price index determined by measuring the price of a standard group of goods meant to represent the “market basket” of a typical urban consumer
Consumer price index
a representative collection of goods and services.
Market basket
the percentage rate of change in price level over time.
Inflation rate
the rate of inflation excluding the effects of food and energy prices.
Core inflation rate
inflation that is out of control.
Hyperinflation
too much money in the economy causes inflation.
Quantum theory
inflation occurs when demand for goods and services exceeds existing supplies
Demand pull theory
inflation occurs when producers raise prices in order to meet increased costs.
Cost push theory
the process by which rising wages cause higher prices, and higher prices cause higher wages.
Wage price spiral
income that does not increase even when prices go up.
Fixed income
a sustained or drop in the price level.
Deflation
the income level below which income is insufficient to support a family or household.
Poverty threshold
the percentage of people who live in households with income below the official poverty threshold.
Poverty rate
how the nation’s total income is distributed among its population
Income distribution
government-issued coupons that recipients exchange for food
Food stamps
illustrates income distribution
Lorenz curve
area where companies can locate free of certain state, local, and federal taxes and restrictions.
Enterprise zones
federal funds given to the states in lump sums.
Block grant
program requiring work in exchange for temporary assistance.
Workfare
